A counterclaim defendant sought recovery of attorneys’ fees under the relevant lease agreements, leading the Fifth Court to review and apply the current Texas Supreme Court precedents on that subject:

1. One set of leases had the following fee provisions:

29.1 Attorney Fees. If this lease is placed in the hands of any attorney due to a default in the payment or performance of any of its terms, the defaulting party shall pay, immediately upon demand, the other party’s reasonable attorney fees, collection costs, costs of litigation, even though no suit or action is filed thereon, and any other fees or expenses incurred by the nondefaulting party.

29.2 Types of Fees. For purposes of this Lease the term attorney fees includes all

charges of the prevailing party’s attorneys and their staff (including without limitation legal assistants, paralegals, word processing, and other support personnel) and any post-petition fees in a bankruptcy court. . . .

The Court reasoned: “Under the broad language of [these] Leases, we agree, as the court did in Rohrmoos, that appellee was not just a plaintiff; he also successfully defended against appellants’ breach of contract counterclaim that sought unpaid lease payments and repair costs for damages to the premises,” and was thus entitled to fees as a “prevailing party” .

2. The second set of leases had this fee provision:

30. Attorneys’ Fees. In the event either party shall fail to comply with any of the covenants, conditions, obligations, rules, or regulations imposed by this Texas Commercial Lease or the laws of the state of Texas, and suit is brought for damages or enforcement, the losing party shall pay to the prevailing party reasonable attorneys’ fees, costs, and expenses incurred in prosecuting these suits.

“Here, the lease specifically requires that the attorneys’ fees be incurred by the
‘prevailing party’ in ‘prosecuting these suits.’ ‘Prosecute’ means ‘to institute legal proceedings against’ or ‘to institute and carry on a legal suit or prosecution: sue.'” Accordingly, the clause did not reach the counter-defendant’s claim, and recovery of fees was prohibited by Intercontinental Group v. KB Home, 295 S.W.3d 650 (Tex. 2009). Desio v. Del Bosque, No. 05-19-00224-CV (Dec. 19, 2019) (mem. op.)

(This is a cross-post from 600Hemphill, our firm’s brand-new blog about the Texas Supreme Court.)

The “Lehmann problem” – the question of when a judgment is truly final (and thus starts the appeal deadline) is a perennial challenge in Texas cases involving multiple parties and issues. The problem has drawn particular attention recently in recent months in family-law cases, where judges often prepare a letter or memo summarizing key rulings. Reversing a Dallas case that found such an instrument to be a final judgment, the Texas Supreme Court held: “[A]n order lacking the unmistakable language of finality—that it resolves all claims between and among all parties and is final and appealable—is ambiguous in a suit under the Family Code when the order does not comport with the statute governing final orders and is otherwise inconclusive as to its intent. If a judicial decree’s finality is ambiguous, a reviewing court should examine the record to determine the trial court’s intent.” In the Interest of R.R.K., No. 18-0273 (Dec. 13, 2019). The opinion also reviews the general contours of the test for judgment finality in Texas.

161 days after a “dwop” dismissal, the plaintiff learned of that order by reviewing the court website, and successfully sought reinstatement. In re Mart, No. 05-19-01355-CV (Dec. 9, 2019) (mem. op.) Tex. R. Civ. P. 306a, however, only extends the trial court’s plenary power if notice is acquired within 90 days of judgment. Observing that “the cases real party cites demonstrate she had potential avenues to obtain reinstatement of the case other than a Rule 306a(4) motion and motion to reinstate, including a restricted appeal and a bill of review,” the Fifth Court granted mandamus relief because the trial court’s reinstatement order was void.

Not without meeting a demanding standard: “Texas uses a functional approach in determining whether a person is entitled to absolute derived judicial immunity. Under this approach, we must ‘determine whether the activities of the person seeking immunity are intimately associated with the judicial process and whether the person exercised discretionary judgment comparable to a judge, as opposed to ministerial or administrative tasks.’ In other words, ‘[i]f an action involves personal deliberation, decision or judgment, it is discretionary; actions requiring obedience to orders or the performance of a duty to which the actor has no choice are ministerial.'” (citations omitted, emphasis added).  In Manning v. Jones, the Fifth Court found a receiver immune from suit for actions taken in connection with a property transactionn that she had been appointed to handle. No. 05-18-01140-CV (Dec. 4, 2019) (mem. op.)

The Fifth Court conditionally granted mandamus relief as to an order quashing a postjudgment deposition, observing: “[T]rial courts have discretion to control the nature and form of discovery, but that discretion is not unlimited. ‘A trial court abuses its discretion by limiting discovery in the absence of some evidence supporting the request for a protective order.’ In this case, counsel for [movant] presented arguments at the hearing on the motion to quash but did not present evidence in support of the motion. [Movant’s] motion was unverified;the transcript from the April 3, 2019 hearing on the motion to dissolve was not made a part of the record at the hearing on the motion to quash; nor did her counsel request the trial court to judicially notice the evidence from the prior hearing. Because no evidence was presented in support of [Movant’s] motion, we conclude the trial court abused its discretion in granting the motion to quash and motion for protective order.” In re Mustang Asset Recovery Ltd., No. 05-19-01036-CV (Dec. 6, 2019) (mem. op.) (emphasis added, citations omitted).

In an unusually nutty case, the parties’ arbitration clause provided:

All disputes, claims, or controversies arising out of or relating to this Agreement, or the breach thereof, except as to the quality of the product delivered, shall be settled solely by arbitration held in Dallas, Texas, in accordance with the rules then obtaining of the American Arbitration Association, and judgment upon any award may be entered in any court having jurisdiction thereof.

(emphasis added). The plaintiff’s allegations “[a]ll . . . concern whether the pecan pieces San Saba sold contained pecan weevil larvae so that they were not merchantable and were unfit for human consumption” – in other words, claims about “the quality of the produce delivered” within the meaning of the above carveout. The Fifth Court thus affirmed the trial court’s denial of a motion to compel arbitration. San Saba Pecan LP v. Give & Go Prepared Foods Corp., No. 05-19-00214-CV (Dec. 6, 2019) (mem. op.)

Faced with a lack of appellate jurisdiction because of a nonfinal order, a party suggested abatement to cure the problem rather than dismissal. The Fifth Court rejected that request: “In so doing, we note nothing in the record reflects determination of the counterclaims will be perfunctory.  Nor does the record reflect a determination is imminent. No trial date has been set, and the record reflects December 20, 2019 is the date set for a hearing on appellant’s motion to set a trial date.” Dixon v. Principal Management Group, Inc., No. 05-19-00895-CV (Dec. 3, 2019) (mem. op.) (citations omitted).

The current state of play about the TCPA in the Fifth Court is well-illustrated by Rouzier v. BioTE Medical, LLC, No. 05-19-00277-CV (Nov. 22, 2019) (mem. op.) (applying, inter alia, Forget About It, Inc. v. BoiTE Medical, LLC, No. 05-18-01290-CV, 2019 WL 3798180 (Tex. App.—Dallas Aug. 13, 2019, pet. filed). It addresses the application of the TCPA’s protection of speech and association rights to business-related communications in the healthcare industry, as well as the application of the commercial-speech exemption in that setting.

Good news, Charles timely appealed the default judgment against her. “Charles filed her notice of appeal fourteen days after the trial court entered judgment.”

Bad news, nothing to appeal: “Because Charles did not file a motion for new trial, she did not introduce any evidence extrinsic to the record to support her satisfaction of any of the Craddock factors. Consequently, we hold that Charles has waived appellate review of her complaint that the trial court’s default judgment should be set aside.” Charles v. Crown Asset Management LLC, No. 05-18-01139-CV (Nov. 26, 2019) (mem. op.).

The Fifth Circuit’s recent opinion in Cutrer v. Tarrant County Local Workforce Development Board, discussed here on 600Camp, offers this fascinating tidbit about why a Texas county’s administrator is called a “county judge”:

“The position of county judge is a remnant of Texas’s time as part of Mexico. Title II, Section VII of the 1827 Constitution of the State of Coahuila and Texas established Ayuntamientos (town councils), charged with municipal administration. And under Article 159 of the 1827 Constitution, the council was to include “Alcades.” “Alcade” is a Spanish term for a magistrate who performs both executive and judicial functions. Today, the county judge principally serves as the chief executive of a Texas county. See Tex. Const. art. V, §§ 16, 18. But in keeping with the historical pedigree of the office, a county judge still performs some judicial functions. See, e.g., Tex. Est. Code § 1002.008(a)(1); Tex. Health & Safety Code §§ 571.012, 573.012.”

A scholarly, yet highly readable article in the Texas Supreme Court Historical Society Journal by former Justice Jason Boatright offers further background on this modern-day legacy of Spanish and Mexican law.

A bill of review is an equitable proceeding allowed by Texas law to challenge a default judgment. While equitable in nature, the proceeding still has serious proof requirements; in particular: “‘[T]he testimony of a bill of review plaintiff alone, without corroborating evidence, is insufficient to overcome the presumption that the plaintiff was served.’ Here, the evidence showed that . . . appellant was personally served . . . at 3815 N. Westmoreland at 7 p.m. on March 23, 2016. The officer’s return is prima facie evidence of the facts of service. Although appellant testified he was not served at that address, there was no other evidence to corroborate that statement. Although he admitted an unrecorded contract for deed showing a conveyance of the Westmoreland property to Alfredo Guzman in 2008, this document does not corroborate his testimony that he was not served at the location.”  Mitchell v. City of Dallas, No. 05-18-01208-CV  (Nov. 20, 2019) (unpubl.) (citations omitted, emphasis added).

Simmons sued Cook for securities fraud; Cook move to dismiss under the TCPA, and the Fifth Court found that Cook failed to show that Simmons’s lawsuit was “in response to” any potentially-protected communication: “Cook does not dispute that Simmons’s pleadings do not mention Cook’s interview with the Texas Rangers or make any reference to Paxton or Servergy. Nor is there any evidence that Simmons was involved in any way with the Texas Rangers’s investigation. According to Cook, his interview was about Paxton, not Simmons. Simmons’s allegations are that Cook made misrepresentations in the sale of securities. ‘Any activities [by Cook] that are not a factual predicate for [Simmons’s] claims are not pertinent to our inquiry regarding whether the TCPA applies.'” Cook v. Simmons, No. 05-19-00091-CV  (Nov. 12, 2019) (mem. op.) (citation omitted).

“After the justice court held a jury trial in a forcible detainer suit and the jury rendered a verdict, appellant appealed to the county court. The county court ruled in appellees’ favor, and appellant appealed. The record before this Court includes only the jury verdict from the justice court and not a judgment from the justice court.” Because the Fifth Court has no more jurisdiction than the court appealed from, it dismissed Anderson v. Weed for lack of appellate jurisdiction. No. 05-19-00864-CV (Nov. 14, 2019) (mem. op.)

An insurer failed to show prejudice, and thus could not take advantage of a “consent-to-settle” provision in an uninsured motorist first-party policy.  The key Texas Supreme Court case “did not recognize difficulty in proving the value of a potential subrogation claim as sufficient prejudice”; to the contrary, it “indicates that the only kind of prejudice sufficient to make a consent-to-settlement breach material is loss of a valuable subrogation right[.]” And the insurer also failed to conclusively prove a loss of value, even under its view of the law. Davis v. State Farm Lloyds, No. 05-18-00969-CV (Nov. 12, 2019) (mem. op.).

In a fraudulent-transfer case, the Fifth Court reversed the denial of a German company’s special appearance when: “AEG Germany was not a party to the Manufacturing Agreement or the Security Agreement;it was not involved inthe “order process” with Power Max and AEG USA;nor was it a party to AEG USA’s lawsuit against Power Max. In fact, Creation has not alleged any contacts by AEG Germany with the state of Texas that ‘give rise’ to Creation’s claims against it, apart from the allegation that AEG Germany was the recipient of fraudulently transferred assets. . . . [A]s the above [“effects test”] cases show, even if we assume a tort was somehow committed and that AEG Germany knew its actions would cause an injury in Texas (assumptions this record does not support), the alleged contacts do not rise to the level of purposeful availment simply because Creation is a Texas company or the alleged harm occurred in Texas.” AEG Power Solutions v. Creation Technologies,  No. 05-19-00195-CV (Nov. 12, 2019) (mem. op.)

The Fifth Court found that the following closing argument was not “incurable” (and thus, had to be objected to during trial). During voir dire, after noting the trial court’s instruction that lawyer argument was not evidence, Plaintiffs’ counsel said:

Despite that, I’ll make a pledge to you, everything I tell you will be 100-percent accurate and truthful. I have been known to make a mistake. If I make that mistake, I’ll own it in closing argument at the end of the case.

Later, during closing argument, defense counsel argued:

Do you remember the pledge that Plaintiffs’ counsel made to you before this trial started? If there was a mistake, he would own it. Okay. So, let’s look at that. He puts up on that overhead what my client says, “I’m responsible for the damages.” For the accident, yes. But what he doesn’t remind you of, he also asked my client, “Do you know what their injuries are, what their treatments are?” He had no idea. So, to insinuate that my client is going to say, “I accept all of this,” is ridiculous. That’s dishonest.”

The Court noted that “‘[u]nsubstantiated attacks on the integrity or veracity of a party or counsel’ has been cited as a type of jury argument that is deemed incurable,” but found that this argument was not incurable given the earlier argument of Plaintiffs’ counsel, Plaintiff’s counsel’s rebuttal of the argument later, and the jury verdict that was generally consistent with the evidence on the central trial issue about damages. Hopkins v. Phillips, No. 05-18-01143-CV (Oct, 29, 2019) (mem. op.)

In a dispute about standing to assert rights as a partner, the Fifth Court made this general procedural point: “Although appellants did not file a rule 93 verified ‘denial of partnership,’ the record shows [plaintiffs] did not assert their ‘admission’ argument below.  Rather, [plaintiffs’] claimed status as a . . . partner was a primary focus of both sides’ arguments at trial. On this record, we conclude capacity was tried by consent.”  (citations omitted, applying Highland Credit v. UBS, 451 S.W.3d 508, 515 (Tex. App.—Dallas 2014, no pet.). Malouf v. Sterquell PSF Settlement LC, No. 05-17-01343-CV (Nov. 7, 2019) (mem. op.)

The Fifth Court affirmed a TCPA dismissal in Kappos v. Baxter: “As part of his representation of his clients, Baxter stated in a motion filed in the federal litigation that there was a judgment in the underlying California state-court litigation. Whether the statements were wrong, fraudulent, or part of a conspiracy to defraud Kappos does not affect the applicability of the defense of attorney immunity. Kappos was not Baxter’s client. Therefore, following Youngkin, we conclude that Baxter is immune from Kappos’s suit based on his actions while representing his clients, including his statements in court filings that there was a judgment in the California state-court litigation. We conclude Baxter established by a preponderance of the evidence the elements of the defense of attorney immunity.” No. 05-19-00020-CV (Oct. 30, 2019) (mem. op.)

The Fifth Court summarized the current state of its precedent on the difficult interplay between estoppel and standing in probate cases: “In her answer to the will contest, Lisa Jo pled the affirmative defense of estoppel, and was therefore required to demonstrate Tia’s acceptance of the proceeds of the mutual fund was inconsistent with her challenge to the Will. . . . .Rather than satisfy her burden, Lisa Jo relied on a case that disagreed with our holding in Holcomb,and argued Tia was burdened with disproving estoppel. Declining an unacceptable invitation for one panel of this court to disregard the holding of another panel, we hold Lisa Jo failed to satisfy her burden, as the Will’s proponent, by failing to demonstrate that Tia accepted greater benefits than those to which she was entitled under the Will or intestacy laws.” In re Estate of Johnson, No. 05-18-01193-CV (Nov. 4, 2019) (unpubl.)

Governor Abbott has appointed Hon. David Evans to return to the Fifth Court and fill its vacant seat; Law360 reports that he may continue to hear some matters from the district court where he presently serves until his replacement is appointed and up to speed. Judge Evans recently donated a kidney to his former colleague, Hon. Carolyn Wright, an act that has raised local awareness about living organ donation. Welcome back, Justice Evans!

An excellent recent article in Law360 summarizes the state of the sometimes-Byzantine structure of Texas’s intermediate appellate courts. The article is behind Law360’s paywall but my remarks are below:

It’s a simple but fundamental point – confirm that the record has the relevant order (or, that there is in fact such an order); see, e.g.:

• “Because the record does not show relator ever filed the motion, we cannot conclude the trial court has a legal duty to rule upon it.”  In re Johnson, No. 05-19-00708-CV (Oct. 21, 2019) (mem. op.); and
• Although appellant asks that the bond be reduced, the record before this Court does not contain a signed order setting the supersedeas bond. Without an order, there is nothing before this Court to review.” Chowdhury v. Wells Fargo Bank, No. 05-19-00965-CV (Oct. 25, 2019) (mem. op.)

The Texas Family Code says: “In a suit in which termination of the parent-child relationship is requested, the court shall appoint an attorney ad litem to represent the interests of: (1) an indigent parent of the child who responds in opposition to the termination.” Accordingly, it is a reversible abuse of discretion not to do so. In re R.R.-L., No. 05-19-00507-CV (Oct. 23, 2019).

The parties’ contract had a 4-year term:

“Subject to jcpenny’s rights to relocate or otherwise change or alter the shops as specified below, the parties agree that the Bodum and O&R Shops will be featured in the designated jcpenny stores for a period of 4 years from the opening date . . .”

But, the “rights . . . specified below” included the right to:

remove, alter, or relocate any and all Bodum or O&R Shops or any portion of a Bodum or O&R Shop. . .

Accordingly, the contract was terminable at will. Bodum USA, Inc. v. J.C. Penney Co., No. 05-18-00813-CV (Oct. 23, 2019) (The opinion has a thorough discussion of Texas contract-interpretation principles, including a reminder that contra proferentum “is a doctrine of last resort.” Substantively, the parties do not appear to have argued whether this termination right made the contract illusory.)

“The court of appeals granted our stay motion! We’re looking good on the mandamus now!” Not necessarily, as shown by In re Gurley, No. 05-19-01118-CV (Oct. 18, 2019) (mem. op.): ” We stayed the trial court’s September 13, 2019 order granting the motion to expunge the lis pendens pending our disposition of the mandamus petition. On our request, real parties filed a response to the mandamus petition. . . . After reviewing the petition for writ of mandamus, the response filed by real parties, and the applicable law, we conclude relator
has not shown he is entitled to the relief requested.” 

After the Confederate disaster at Gettysburg in 1863, the wily Robert E. Lee held off Ulysses Grant for two more years in a series of battles. Dallas’s Confederate statuary is proving similarly wily; after an initial stay to receive full briefing on the point, the Fifth Court agreed that a writ of injunction was appropriate to maintain the downtown Confederate memorial (right, in part): “The Monument was created in 1896 and has already been relocated once. There is no guarantee that the removal process will be seamless and without damage to the Monument, or that if it is ultimately returned to Pioneer Cemetery that it will be in the same condition as it is today.” The Court required the plaintiff to post a $50,000 bond. It also found that a similar application was moot as to a statute of Lee that has already been sold and reinstalled in the Big Bend area of far West Texas (Texas, incidentally, being the location of Lee’s last command in the U.S. Army before siding with the Confederacy.)  In re: Return to Lee Park, No. 05-19-00774-CV (Oct. 10, 2019) (mem. op.)

John Doe, a shadowy figure who has haunted Anglo-American jurisprudence for centuries, produced a failure of appellate jurisdiction in Chappell v. City of Balch Springs. Chappell sued “the City of Balch Springs, Shaila Lynn Gay, Jonathan Haber, and John Doe Supervisors 1-5.” The three named defendants successfully moved to dismiss under Rule 91a, but Chappell was unable to appeal because her “claims against John Doe Supervisors 1-5 remain pending” and thus kept the Rule 91a order from becoming a final judgment. No. 05-19-01046-CV (Oct. 7, 2019) (mem. op.)

In Stegall v. TML Multistate Intergovernmental Employee Benefits Pool, Inc., the panel majority (Justice Pedersen writing, joined by Justice Whitehill) held that a serious medical-treatment claim about cancer treatment was barred by the sovereign immunity of  two parties:”TML . . . an intergovernmental self-insurance risk pool that operates under the Texas Interlocal Cooperation Act,” and UMR . . . one of TML’s third-party administrators.” It summarized: “This case presents an emotional and tragic scenario in which we are asked to ignore the  governmental immunity enjoyed by TML and UMR. However, this Court . . . must apply the law, and mandatory authority interpreting such law, to effectuate the Legislature’s intent.”

A dissent (Justice Partida-Kipness) saw the issue differently: “By creating and participating in the risk pool, TML performed a governmental function for which immunity applies.  The governmental nature of its actions, however, ended with that pooling. Stegall maintains that TML and UMR caused the wrongful death of her husband through improper claims adjustment procedures and decisions. . . . . Those actions are not governmental functions because they are decisions related to the adjusting of an individual insurance claim.” No. 05-18-00239-CV (Oct. 2, 2019) (mem. op.) (all emphasis added).

600Commerce and 600Camp are recognized in the first-ever list of “Texas Trailblazers,” as just published by Texas Lawyer!

The petitioner in a TCPA dispute argued that it was controlled by a previous panel opinion called Hartley, and the Fifth Court agreed. It summarized the applicable rules, very similar to the Fifth Circuit’s “rule of orderliness” –

The real parties in interest argue that Hartley is distinguishable because they present arguments and authorities that were not discussed in this Court’s opinion in Hartley. However, those arguments do not distinguish Hartley. If we agreed with those arguments, we would have to conclude Hartley was wrongly decided and must be overruled. We follow our own precedent. Dyer v. Medoc Health Servs., LLC, 573 S.W.3d 418, 427 (Tex. App.—Dallas 2019, pet. denied). “We may not overrule a prior panel decision of this Court absent an intervening change in the law by the legislature, a higher court, or this Court sitting en banc.” MobileVision Imaging Servs., L.L.C. v. LifeCare Hosps. of N. Tex., L.P., 260 S.W.3d 561, 566 (Tex. App.—Dallas 2008, no pet.). Accordingly, we adhere to our decision in Hartley.

No. 05-19-01016-CV (Sept. 23, 2019) (mem. op.).

Like its counterpart in Greek mythology, the hydra of mandamus jurisdiction is a many-headed beast – but it only reaches the work of a Justice of the Peace under very limited circumstances: “This Court does not have writ jurisdiction over a justice of the peace unless the justice is interfering with our appellate jurisdiction. See Tex. Gov’t Code Ann. § 22.221(a), (b).” In re Gardner, No. 05-19-01087-CV (Sept. 20, 2019) (mem. op.). The referenced Government Code provisions provide:

Sec. 22.221. WRIT POWER. (a) Each court of appeals or a justice of a court of appeals may issue a writ of mandamus and all other writs necessary to enforce the jurisdiction of the court.

(b) Each court of appeals for a court of appeals district may issue all writs of mandamus, agreeable to the principles of law regulating those writs, against:

(1) a judge of a district, statutory county, statutory probate county, or county court in the court of appeals district;

(2) a judge of a district court who is acting as a magistrate at a court of inquiry under Chapter 52, Code of Criminal Procedure, in the court of appeals district; or

(3) an associate judge of a district or county court appointed by a judge under Chapter 201, Family Code, in the court of appeals district for the judge who appointed the associate judge.

This blog’s “older sister,”  600Camp,  celebrates its birthday this week, and invites you to join the festivity with some shrimp remoulade; here’s the recipe from Galatoire’s so you can spice up your week!

Can a trial court sidestep the TCPA’s timely-hearing requirement? “This mandamus proceeding presents the question whether the trial court has the discretion to deny a TCPA movant’s reasonable requests for a timely hearing and set the motion for hearing after the last possible date that the TCPA permits. We hold that the trial court lacks such discretion because the TCPA requires the trial court to hold a timely hearing when the movant acts with reasonable diligence to obtain such a hearing. We further hold that the TCPA movant in this situation lacks an adequate remedy by appeal because he forfeits TCPA relief, including a right to an interlocutory appeal, if a timely hearing is not held.” In re Herbert, No. 05-19-00126-CV (Sept. 19, 2019).

In Duncan v. Acius Group, the panel agreed that the TCPA can reach statements about the topic of animal cruelty, but differed on the connection of a particular statement to that topic. Justice Partida-Kipness’s dissent argued: “I do not disagree that an allegation of animal cruelty can be a matter of public concern, the context and situation surrounding Morris-Duncan’s purported statement about Maxwell does not support such a conclusion here. It is clear from the context of her statements about Maxwell, that Morris-Duncan’s alleged comments were not made out of a concern for the welfare and safety of the animals under Maxwell’s care,but rather out of a desire –to paint Maxwell ina bad light and to call his character into question after ACIUS terminated her husband’s employment.” (emphasis added). The panel also reaffirmed that a nonsuit does not moot a TCPA motion. No. 05-18-01432-CV (Sept. 13, 2019) (mem. op.)

A litigant requested that the Fifth Court take judicial notice of information about the address of an entity; the Court declined to do so: “That document is not part of the summary-judgment evidence. We decline to take judicial notice of the document. ‘The Court of Appeals is not a trier of fact. “For us to consider evidence for the first time, never presented to the trial court, would effectively convert this Court into a court of original, not appellate jurisdiction.”‘ . . . Appellate courts may take judicial notice of documents outside the appellate record to determine their jurisdiction or to resolve matters ancillary to decisions that are mandated by law, such as calculation of prejudgment interest when the appellate court renders judgment. This case does not involve those situations.” Thornton v. Columbia Medical Center, No. 05-18-01010-CV (Sept. 12, 2019) (mem. op.).

The trial court held Steven Topletz in contempt for not producing documents about a family trust, punishing him with a fine and 14 days in jail. The Fifth Court denied his habeas application, noting that Topletz, as a trust beneficiary, had a right under the trust instrument to request the relevant material (thus distinguishing In re: Kuntz, 124 S.W.3d 179 (Tex. 2003), which involved the petitioner’s physical access to documents he did not have a legal right to.) In re Topletz, No. 05-19-00327-CV (Sept 11, 2019) (mem. op.).

The Fifth Court reaffirmed its treatment of an important procedural issue about the TCPA in Bass v. United Devel. Funding: “[F]ollowing our precedent, we only consider the pleadings and evidence in favor of the plaintiff’s case when determining whether it established the requisite prima facie proof. It is not this Court’s province to consider and weigh evidence submitted by Hayman to contradict UDF’s evidence.” No. 05-18-00752-CV (Aug. 21, 2019) (mem. op.):

Hon. Ada Brown of the Fifth Court has now been confirmed by the full Senate for the Northern District of Texas. Every best wish to Justice Brown as she becomes Judge Brown.

Today’s Dallas Morning News reports on an extraordinary act of kindness involving former Justices of the Fifth Court – Hon. David Evans is donating a kidney to Hon. Carolyn Wright. Every best wish to them both.

The law firm of Riggs & Ray and the State Fair of Texas have been involved in a long-running dispute about the firm’s “public information” requests to the Fair. In the latest chapter, Riggs & Ray, P.C. v. State of Fair of Texas, the Fifth Court reversed the TCPA dismissal of a declaratory-judgment lawsuit brought by R&R against the Fair about the Fair’s public-inforaation obligations, finding that the Fair had not established a sufficient connection to the rights of petition or speech. A dissent said that the majority required too tight a connection to protected activity, noting: “The predicate communication here is SFT’s thrice judicially communicated (right to
petition) statement that it is not required to provide information to R&R regarding the City of Dallas’s financial relations with SFT (right of free speech regarding a matter of public concern),” and cautioning that the majority’s approach would weaken protection against SLAPP suits, “a category of cases at the heart of why the legislature enacted the TCPA in the first place.” No. 05-17-00973-CV (Sept. 5, 2019) (mem. op.)

The Fifth Circuit noted a limit on its Flakes opinion in Oliver v. Saadi, No. 05-17-01403-CV (Aug. 30, 2019) (mem. op.): “Oliver is obliged to attack every ground that by and of its own force could have produced the judgment. He is not obliged to marshal and attack every subsidiary argument and citation to authority that may have informed the trial court’s thinking along the way. To be sure, the arguments relating to the admission or exclusion of evidence may vary and here include qualifications, reliability, and relevance. But none of these interstitial evidentiary debates would amount either to a ‘ground’ for summary judgment on their own account.”

The Fifth Court affirmed and part – and reversed in part – a TRCP 91a dismissal in  Royale v. Knightvest  Management LLC, No. 05-18-00908-CV (Aug. 30, 2019) (mem. op.). The Court summarized the standard as follows (citations omitted):

“[W]e construe the pleadings liberally in favor of the plaintiff. Under the fair-notice pleading standard we apply to determine whether the petition’s allegations are sufficient to allege a cause of action, we assess whether the defendant can ascertain from the pleading the nature of the controversy, its basic issues, and the type of evidence that may be relevant. ‘Rule 91a provides a harsh remedy that should be strictly construed.’ The rule is not a substitute for special exception practice under rule 91 or summary judgment practice under rule 166a, both of which come with protective features. If a petition provides sufficient facts to give fair notice of the claim, then a motion seeking dismissal based on lack of a basis in fact should be denied.”

While affirming on the merits, the Fifth Court rejected an award of attorneys’ fees under Tex. R. Civ. P. 91a when the ground for dismissal was a lack of subject matter jurisdiction rather than the merits of a pleaded claim: “[N]o Texas case has ever awarded attorney’s fees under rule 91a.7 where the dismissal resulted from a lack of subject matter jurisdiction. In these circumstances rule 91a is not the ‘vehicle’ by which the case is disposed and, conversely, jurisdiction is not a ‘ground’ to which 91a is directed.” Dallas County Republican Party v. Dallas County Democratic Party, No. 05-18-00916-CV (Aug. 26, 2019) (mem. op.)

A highly-practical part of  Texas procedure appears in Section 132.001 of the Civil Practice and Remedies Code, which says that an unsworn declaration may be used in place of an affidavit in most situations. That provision details the form that such a declaration should take. Following Hays Street Bridge Restoration Group v. City of San Antonio, 570 S.W.3d 697 (Tex. 2019), the Fifth Court found a declaration inadequate when it omitted the declarant’s birthdate and other specified information. Goldberg v. EMR (USA Holdings) Inc., No. 05-18-00261-CV (Aug. 22, 2019). (This case’s other holdings about the scope of the TCPA were significantly revised on rehearing in January 2020, as described in another blog post.)

The Fifth Court granted mandamus relief to enforce the ecclesiastical abstention doctrine in In re First Christian Methodist Evangelistic Church: “[T]his case involves questions surrounding the termination of a church employee and allegations surrounding that termination. Like the claims asserted in those [prior] cases, the Senior Pastor’s claims do not present purely secular issues of contract law first and foremost because he was not terminated from a secular position. Moreover, the Senior Pastor was not terminated based on secular rules or procedures. Rather, the Church presented evidence that the Church Conference, which is comprised solely of members in good standing of the Church, voted to terminate the Senior Pastor’s employment ‘consistent with the internal policies and procedures of the Church.'” No. 05-18-01533-CV (Aug. 30, 2019) (mem. op.) (emphasis added).

Dallas-Fort Worth is the fourth largest metropolitan area in the United States, and it is only a matter of time until it passes Chicago to become #3. Dallas is routinely ranked among the nation’s best cities. Yet, as noted in a recent Texas Lawbook op-ed, it is significantly underrepresented on the Texas Supreme Court. Hopefully, geographic diversity will play a role in future appointments to that Court.

Denny successfully sued Chang for medical malpractice, based on a cotton ball left inside her head after brain surgery. The key appellate issue was a jury question about Denny’s “degree of diligence” in bringing suit – a finding needed to support her open courts counter-defense to the two-year statute of limitations on her claim. The majority opinion first found waiver about an objection to the form of the question, and then found that sufficient evidence supported the jury’s finding, noting testimony about her difficulty in finding a treating physician who did not “fear[] they were going to be dragged into litigation,” and that her health problems precluded her from meeting with counsel for substantial periods of time. Chang v. Denny, No. 05-17-01457-CV (Aug. 23, 2019) (mem. op.).

A dissent criticized the treatment of this issue as one of fact, warning of it “disappearing into the amorphous slurry of jury deliberations,” and that “the misunderstandings and inaction of her legal counsel” were to blame for the delay. Underlying the dissent was concern as to “why the Legislature has remained silent for the past 18 years” since the Texas Supreme Court first connected Texas’s open-courts guarantee to an inherently undiscoverable medical injury in Shah v. Moss, 67 S.W.3d 836 (Tex. 2001).

CExchange sold several thousand used headphones and speakers to Top Wireless. Top Wireless complained about the quality of the goods; CE Exchange defended by reference to an “as is” clause in their contract documents. The Fifth Court found that the clause did not preclude Top Wireless’s claims and affirmed a jury verdict in its favor, noting:

• The jury’s finding on a contract-formation question “amounts to a determination that the ‘as is’ clause was not an operative part of the subject agreement”; and
• Alternatively, other jury findings established the fraudulent-inducement exception to the enforceability of such a clause, citing Prudential Ins. v. Jefferson Assocs., 896 S.W.2d 156 (Tex. 1995).

CExchange, LLC v. Top Wireless Wholesaler, No. 05-17-01318-CV (Aug. 23, 2019) (mem. op.).

The panel in CKJ Trucking v. City of Honey Grove found a waiver of sovereign immunity in an unusual fact situation involving an off-duty police officer. The Fifth Court considered whether to take the matter en banc, and it appears to have fallen short by one vote. the Court’s five Republicans joined a dissent by Justice Reichek; three of whom dissented yet more in an additional opinion. No. 05-18-00205-CV (July 23, 2019 (panel), August 22, 2019 (en banc opinions).

This footnote:

when not responded to in the trial court, was a sufficient basis for affirmance of a no-evidence summary judgment on appeal as to the “confidentiality agreement” referenced in the footnote. Prophet Equity LP v. Twin City Fire Ins. Co., No. 05-17-00927-CV (Aug. 19, 2019) (mem. op.).

Section 21.563(c)(1) of the Business Organizations Code says: “If justice requires . . . a derivative proceeding brought by a shareholder of a closely held corporation may be treated by a court as a direct action brought by the shareholder for the shareholder’s own benefit.” Cooke v. Karlseng reminds that this statute serves a specific purpose–a reminder with important consequences for standing and limitations issues: “Section 21.563 does not turn a derivative claim into an individual claim. This Court has concluded that although the statute permits a court to ‘treat a derivative action as a direct action by a shareholder, the claims remain vested in the corporation.’ Rather than transforming the nature of the plaintiff’s claim, the statute permits the trial court to award damages in a derivative proceeding directly to the shareholder ‘if necessary to protect the interests of creditors or other shareholders of the corporation.'” No. 05-18-00206-CV (Aug. 14, 2019) (mem. op.).

The plaintiff in Global Supply Chain Solutions LLC v. Riverwood Solutions, Inc, a trade-secrets dispute, argued “the inevitable disclosure doctrine applies to provide evidence raising a fact issue on damages.” The Fifth Court observed that Texas has adopted the Unitorm Trade Secrets Act, which allows injunctive relief in connection with “threatened misappropriation” of trade secrets. But under Fifth Court precedent, temporary-injunction proceedings about trade secrets do not put the “ultimate merits” at issue; accordingly, “a threatened misappropriation for purposes of a temporary injunction is not a substitute for evidence of the ‘actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss’ to raise a fact issue on damages in response to a motion for summary judgment.” No. 05-18-00188-CV (Aug. 16, 2019) (mem. op.)

Tex. R. App. 49.7 says: “A party may file a motion for en banc reconsideration as a separate motion, with or without filing a motion for rehearing. The motion must be filed within 15 days after the court of appeals’ judgment or order, or when permitted, within 15 days after the court of appeals’ denial of the party’s last timely filed motion for rehearing or en banc reconsideration. . . . ”

An en banc majority of the Fifth Court concluded that this rule allowed the filing of a petition for en banc reconsideration within 15 days of an order denying panel rehearing. A concurrence reached the same result for a different reason, “informed by a mandate from the supreme court that requires us to examine a case on its merits when there is an ‘arguable interpretation’ that would allow us to do so.” (Its author, Justice Schenck, followed similar principles in his dissent last year from St. John’s Missionary Baptist Church v. Flakes.) And a dissent approached the rules differently, finding that they “treat panel rehearing and en banc reconsideration motions equally in this regard and give a party only one guaranteed opportunity to file either or both of those motions unless we change our judgment or opinion.” Cruz v. Ghani, No. 05-17-00566-CV (July 22, 2019) (en banc).

Majority: “Gutman’s petition alleges that Wells requested a release, Gutman refused to provide the release, and Wells and Arbitrage harassed and threatened Gutman because he refused to provide the release. This sets out a controversy—whether Gutman must provide the requested release—that is real and not hypothetical. Taking all reasonable inferences in Gutman’s favor there is a justiciable controversy because Wells is repeatedly harassing and threatening Gutman. Although these allegations are less than specific, at this early [Rule 91a] stage they adequately assert that the declaratory judgment will serve a useful purpose of terminating the parties’ controversy and ending the harassment and threats.”

Dissent: “First, Gutman does not seek construction of a contract, nor does he argue that his rights have been ‘affected by a statute, municipal ordinance, contract, or franchise . . . .’ Second, a fair reading of Gutman’s petition, and the majority’s characterization of it, shows his claims for civil harassment, to the extent such a cause of action exists, sound in tort.”

Gutman v. Wells, No. 05-18-01227-CV (Aug. 5, 2019) (mem. op.), and dissent.

Ward sued Gray, alleging that “Gray forced Ward’s resignation to preclude the Partnership’s obligation to purchase Ward’s [partnership] interest. . . . In addition, Ward alleges that [the general partner] made defamatory statements about his employment status when Partnership employees were told that Ward resigned.”

The relevant limited-partnership agreement, signed by both Gray and Ward, said: “All disputes and claims relating to this Agreement, the rights and obligations of the parties hereto, or any claims or causes of action relating to the performance of either party that have not been settled through mediation will be settled by arbitration.”

The Gray v. Ward majority found that all of Ward’s claims were subject to arbitration: “As Ward’s petition demonstrates, the factual allegations supporting his contract and fiduciary duty breach claims are intertwined with the LP Agreement and Ward’s wrongful termination and defamation claims. Indeed, the only way the statement about Ward’s resignation could be defamatory is in the context of the limited partnership’s operation. The LP Agreement controls the terms of the buy-out from which the entire dispute arises. Under these circumstances, we cannot conclude that Ward’s wrongful termination and defamation claims are completely independent of and can be maintained without reference to the LP Agreement.”

A dissent reasoned: “Ward’s employment-related claims have no significant relationship to the limited partnership agreement, and . . . the arbitration agreement here applies only to Ward’s role as a limited partner . . . , and not to his distinct role as an employee,” and concluded: “This is yet another case in which arbitration becomes a matter of coercion, not consent, with the right to trial by jury as the recurrent fatality.”

No. 05-18-00266-CV (Aug. 9, 2019).

• I have an Op-Ed piece in today’s Dallas Morning News about interesting recent dissents in the Dallas Court of Appeals.
• And, I have a recent Texas Lawbook article about the en banc opinions in McPherson v. Rudman.

A slight variation in the Fifth Court’s standard summary of the mandamus standard appeared in In re Oncor: “Entitlement to mandamus relief requires relator to show that the trial court abused its discretion, which may occur if the trial court fails to correctly analyze or apply the law, In re Sw. Bell Tel. Co., L.P., 226 S.W.3d 400, 403 (Tex. 2007), or in making a factual determination lacking evidentiary support, see In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding).” No. 05-19-00288-CV (July 23, 2019) (mem. op.)

The panel opinion in McPherson v. Rudman affirmed a defense verdict in a medical-malpractice case. The plaintiff sought en banc review, which was denied — barely. Justice Schenck, who wrote the panel opinion, authored a strongly-written concurrence; Justice Partida-Kipness’s dissent was joined by five of the other Democratic Justices.

A valet’s ill-advised joyride in a customer’s limited-edition Mazda Miata led to the case of Parking Co. of Am. Valet, Inc. v. Fellman. Among other holdings, the Fifth Court noted:

• Publicly-available sales price data. An expert’s use of asking prices from websites like cars.com was acceptable when: “This case does not involve natural gas, real estate, or other market where the sales price of comparable property is readily determinable.”
• Relevance of later sale. “[T]he car was not in the same condition when it was sold as it was before the accident; the evidence showed it was in better condition. Between the accident and the sale, Fellman spent about $1,000 upgrading the
  car’s brakes, and he put new tires on the car shortly before he sold it.”

05-17-01277-CV (July 31, 2019) (mem. op.)

Richardson Business Center proved an easement by estoppel, and appealed the trial court’s decision to not award attorneys’ fees for its successful declaratory-judgment action. However: “The trial court did not file findings of fact or conclusions of law. Without findings of fact establishing the basis for the trial court’s exercise of discretion, we cannot conclude as a matter of law that the trial court abused its discretion in declining to award attorney’s fees.” Hazzani v. Richardson Business Center, No. 05-18-00346-CV (July 21, 2019) (mem. op.)

The Mian Devel. Corp. v. State of Texas involved an epic “battle of the experts” arising from the condemnation of some parking for the Sterling Hotel, a large hotel complex on I-35 near downtown Dallas. The hotel’s owners offered experts calculating compensation of $13,600,101 or $19,100,000; the State offered experts calculating compensation at $1,027,927 or $764,970, and also called an expert who said the Sterling was an unviable business. The jury awarded damages of $1,186,350 and the owner appealed. The Fifth Court affirmed in a detailed review of these experts’ testimony, discussing, inter alia: (1) the line between unreliable methodology (admissibility) and material for cross-examination (weight) (pages 10-11); (2) the concept and legal definition of fair market value (page 13); (3) five evidentiary issues about objecting to discussion of material relied upon by an expert (pages 18-19); and (4) throughout, the accepted methodologies and data resources used in this area of law. No. 05-17-01385-CV (July 18, 2019) (mem. op.).

July 19 is notable as the birthday of Samuel Colt, and as the day the Fifth Court gave two clean examples of when mandamus is, and is not, available:

• YES. The trial court granted a motion to reinstate after the expiration of plenary power. The Fifth Court granted the writ “instanter” in this situation, since the trial court’s lack of jurisdiction was established with certainty. In re Southern Management, No. 05-19-00653-CV (July 19, 2019) (mem. op.)
• NO. The trial court declined to find certain materials were confidential and thus covered by its protective order–a topic as to which the Fifth Court “afford[s] the trial court broad discretion” and requires “facts showing a particular, specific, and demonstrable injury” and “detailed information to support its claim of privilege or confidentiality.” In re Toyota, No. 05-19-00030-CV (July 19, 2019) (mem. op.)

In an artful scramble to avoid Dyer v Medoc Health Services, 573 S.W.3d 418, 424 (Tex. App.–Dallas 2019, pet. denied), the movant abandoned the argument that the relevant business communications dealt with “a matter of public concern,” and instead focused on whether the communications were in connection with “a good, product, or service in the marketplace” — namely, workplace complaints about the plaintiff. The panel majority was not persuaded, concluding that “[t]he allegations against Damonte clearly are not based on, related to, or in response to conversations Damonte purportedly had with employees about problems they were having with the company,” and that “nothing in Hallmark’s lawsuit suggests are predicated on anything other than Damonte’s alleged involvement in a scheme to misappropriate and use Hallmark’s confidential information.” A concurrence cautioned that “[t]he majority opinion should not be construed to mean the content of the communication at issue must itself be defamatory or actionable” to be actionable. No. 05-18-00874-CV (July 12, 2019) (mem. op.)

On June 28, the Texas Supreme Court denied the petition for review in Dyer v. Medoc Health Services, 573 S.W.3d 418 (Tex. App.–Dallas 2019), soldifying the foundation for several recent opinions from the Fifth Court that have limited the reach of the TCPA.

In Clean Energy v. Trillium Transportation Fuels, No. 05-18-01228-CV (July 9, 2019) (mem. op.), the Fifth Court applied the “commercial speech” exemption to communications made by Clean Energy, reasoning: “Clean Energy sent unsolicited emails to Trillium’s customers, indicated Trillium’s prices were too high, and attempted to meet with Trillium’s customers to ‘present our renewable CNG offering and support services’ and discuss ‘what we could do today.’ The fact that the emails do not provide specific details about Clean Energy’s pricing or business proposal does not mean the emails are not about Clean Energy’s goods and services. Because part of Clean Energy’s communications involves its goods and services, [Dickens v. Jason C. Webster, P.C., No. 05-17-00423-CV, 2018 WL 6839568 (Tex. App.–Dallas Dec. 31, 2018, no pet.) (mem. op.)] is distinguishable and does not control the outcome under these facts.” (LPCH represents Clean Energy in this matter.)

The recent case of  SIG-TX Assets v. Serrato, over a dissent, declined to require arbitration of nonsignatories’ claims about mishandled funeral services. It would be wrong to read too much into that case, in light of Meritage Homes v. Mudda, which required nonsignatories to arbitrate claims about a home’s construction: “Here, we are presented with facts requiring application of the exception because the Muddas are seeking benefits under the Limited Warranty while simultaneously attempting to avoid its arbitration provision.” No. 05-18-00934-CV (July 3, 2019) (unpublished).

The “case-within-a-case” requirement for a legal-malpractice claim led to affirmance of a defense summary judgment: “While [the expert’s] opinion provides examples of steps independent counsel could have taken on [Plaintiff’s] behalf, we conclude his opinion that the outcome would have been different is speculative and conclusory. . . . [His] testimony may raise an inference that a different attorney might have more aggressively pursued a temporary injunction to prevent [the bank] from foreclosing, but whether the trial court would have granted a request for an injunction is entirely speculative; as is [his] opinion that had the temporary injunction against [Plaintiff] been denied, [Plaintiff] would have re-financed . . . or sold . . . to a different buyer at a higher purchase price.”  No. 05-18-00467-CV (July 3, 2019) (mem. op.) (emphasis added).

The complex structure of Texas’s intermediate appellate courts was the subject of Justice Schenck’s concurrence from the denial of en banc review in Brooks-PHS Heirs, LLC v. Bowerman, a docket-equalization transfer from San Antonio. The opinion observes: “When one intermediate court of appeals sits in the place of another, it applies the precedent of the transferor court. Tex. R. App. P. 41.3. Of course, we (or more directly I as the author) have endeavored to do that here, applying San Antonio precedent to arrive at the result we think that appellate court would reach. The question of whether that application is correct at this point is essentially out of reach of the en banc review mechanism as it is described in rule 41.2, as the panel has already applied what it sees as San Antonio law; our remaining colleagues that constitute the en banc court in Dallas could likewise only predict how San Antonio would rule; and the San Antonio Court of Appeals has no seat at the table. See id. 41.2 (decision by en banc court).” No. 05-18-00356-CV (July 5, 2019) (emphasis added).

The last stand of Dallas’s Confederate War Memorial (right) has been extended until mid-July; the Fifth Court stayed matters until it can receive and consider full briefing on the request for a writ of injunction during an appeal about the Memorial and the related statue of Robert E. Lee. In re: Return to Lee Park, No. 05-19-00774-CV (July 1, 2019) (order). Robert Wilonsky has a good summary of the current status of the litigation in the Dallas Morning News.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

The Texas court system has more supreme courts than the United States (2 for Texas, 1 for the USA), and more intermediate courts of appeal as well (14 for Texas, 13 for the USA). The true complexity of the Texas courts, however, lies in the sometimes-Byzantine interplay between district courts (the standard, county-wide trial court) and county courts (depending on the county, potentially “constitutional county courts,” “statutory county courts,” or “county courts at law”). An excellent example appears in Wood v. Lassiter, a dozen-page opinion about county-court jurisdiction over a dispute involving the boundary for Kaufman County road maintenance obligations. No. 05-18-01059-CV (June 28, 2019) (mem. op.)

Perlman v. EKLS Firestopping & Construction is the latest opinion from the Fifth Court that affirms the denial of a TCPA motion to dismiss, when the communications and associations at issue were fundamentally private and business-related. The appellee sought an award of fees for a frivolous motion, but the Court reminded: “[Appellee], however, did  not file a notice of appeal, which is required to alter a trial court’s judgment or other appealable order. Under [Tex. R. App. P.] 25.1(c), we may not grant a party who does not file a notice of appeal ‘more favorable relief than did the trial court except for just cause . . . .” No. 05-18-00971-CV (June 28, 2019).

The Howards argued that their note was not a negotiable instrument (and thus, not subject to a 6-year statute of limitations), citing provisions in the note about late fees, notice obligations, and a usury savings clause. While under the UCC, an instrument can become non-negotiatble if it includes “any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money,” these provisions were permissible as “an undertaking or power to give, maintain, or protect collateral to secure payment.” PNC v. Howard, No. 05-17-01484-CV (June 24, 2019) (applying TBOC § 3.104(a)).

Conditionally granting mandamus relief from this order by the Fifth Court (a “lift-stay” order in a TCPA appeal), in In re Geomet Recycling, the Texas Supreme Court held:

“[T]o the extent EMR faced irreparable harm, it had an avenue available to it by which a court could provide a remedy without violating the statutory stay. It did not pursue that  remedy but instead asked the court of appeals to lift the stay in violation of [CPRC] section 51.014(b). EMR’s choice of an unsuited procedural mechanism does not create a constitutional problem we must address. And to the extent EMR did not face irreparable harm but simply wanted a hearing on the trial-court motions that had been pending when Geomet’s appeal triggered the stay, that is exactly what [CPRC] section 51.014(b) prohibits.”

It also observed: “Whether . . . an order under [TRAP] 29.3 referring a motion to the trial court for findings and recommendations would violate the statutory stay ‘of all trial court proceedings’ is a question the parties have not briefed and that we need not decide.” No. 18-0443 (June 14, 2019).

In Lei v. Natural Polymer Int’l Corp., the Fifth Court affirmed the denial of a TCPA motion (and then some) in a trade-secrets dispute about the making of “natural pet treats,” holding:

• Association. Under Dyer v. Medoc Health Services, while another appeal district might have a different view, under Dallas precedent the plaintiff failed to invoke the TCPA’s protection of assocation rights;
• Speech. “We cannot conclude that these alleged ‘communications’ are tangentially related to a matter of public concern simply because the proprietary and confidential information at issue belonged to a company in the business of selling pet treats that promote health ‘or because the alleged tortfeasors hoped to profit from their conduct.’”’
• Petition. [T]o construe the TCPA such that appellants exercised a ‘right to petition’ based on their deposition testimony . . . ‘is an absurd result that would not further the purpose of the TCPA to curb strategic lawsuits against public participation.’” (applying Miller Weisbrod, LLP v. Llamas-Soforo, 511 S.W.3d 181, 192–93 (Tex. App.—El Paso 2014, no pet.); and
• Award of fees. It was not an abuse of discretion to find the TCPA motion frivolous, when at an earlier temporary-injunction hearing, “[t]he trial court had already heard evidence supporting NPIC’s pleaded causes of action at the time appellants filed their motion to dismiss.”

No. 05-18-01041-CV (June 21, 2019).

Here is my PowerPoint from the recent appellate course sponsored by University of Texas CLE. I also discussed this month’s opinion in In re: City of Houston, granting mandamus relief in a privilege dispute.

Valor Energy sued Price Drilling in Dallas County; Price sought transfer to Starr County, where the relevant oil well was located, and the Fifth Court denied Price’s mandamus petition, which was based on the mandatory-venue provision about the location of real estate (CPRC § 15.011). The Court reasoned: “The record shows that the contract was executed in Dallas County, the alleged negligence is based on Price’s performance of its drilling obligations, and the fraud claims relate in part to some actions directed at Valor in Dallas County. Valor does not seek damages for oil that has been wrongfully removed from its property, and does not seek any declarations as to Valor’s or Price’s rights to any portions of the property itself. Rather, Valor seeks breach of contract, fraud, and negligence damages for Price’s failure to fulfill its duties under the contract to re-drill the Well and for the misrepresentations made by Price to Valor regarding Price’s work on the alleged compliance with the terms of the contract.”  In re Price Drilling Rig No. 5 Co., No. 05-19-00344-CV (June 17, 2019) (mem. op.)

“[Appellant]’s motion asserted that [he] was ‘unsophisticated in legal matters’ and did not understand he was required to file an answer and thought he would receive a hearing notice before any judgment was rendered. Not understanding a citation and then doing nothing after being served does not constitute a mistake of law that is sufficient to meet the first Craddock element.” Chapple v. Hall, No. 05-18-01209-CV (June 14, 2019) (mem. op.)

Not offered in evidence? Might not be a problem, at least on the following record::

On appeal, the Pelley parties argue that the evidence is legally insufficient to support the award because there was no sworn expert witness testimony, neither of the “two exhibits which the attorney for the Wynne Parties handed to the court reporter to be marked . . . were ever offered into evidence by the [Wynne parties], nor were they ever admitted into evidence by a ruling of the Trial Court.” They also contend that even if the statements by the Wynne parties’ counsel had been properly presented to the trial court, his assertions “would have been objected to as being unreliable, and should have been excluded as evidence.” [1] The Pelley parties, however, did not object to, but rather discussed, the Westfall affidavit in their arguments in the trial court. [2] Nor did the Pelley parties object to the Wynne parties’ references to Westfall’s billing records on the basis they were not in evidence. The reporter’s record clearly shows that the parties and the trial court treated the Westfall affidavit and attached billing records as if they had been admitted into evidence. We conclude that the Westfall affidavit and attached billing records were, “for all practical purposes, admitted.”

Pelley v. Wynne, No. 05-18-00550-CV (June 13, 2019) (emphasis and colorful highlighting added).

A dispute about the operation of the mandate rule, in a long-running dispute about the winding up of a law partnership, unfolded as follows:

1. Trial court, first time. The trial court’s first judgment, in a dispute about the winding-up of a law partnership, “[a]mong other things, . . . ordered Pelley and Scott Pelley P.C. to pay $55,672.80 to Wynne and Smith as reimbursement for overhead operation expenses incurred as part of the law firm’s post-dissolution expenses during the years ‘2012 to present’ and ordered the Pelley parties to pay $40,000 to the Wynne parties for attorney’s fees incurred ‘in connection with the Gibbs Estate and Shankles Estate cases.'” (emphasis added, here and below)
2. Court of appeals, first time. On appeal from that judgment, the Fifth Court held, in part: “[T]he trial court erred when it failed to include contingent attorney’s fees on appeal in the final judgment.
   The trial court’s final judgment is reversed as to Wynne’s and Smith’s request for contingent appellate attorneys’ fees and remanded for further proceedings consistent with this opinion. The remainder of the trial court’s judgment is affirmed.”
3. Trial court, second time. On remand, the trial court awarded additional, post-judgment overhead expenses, to which the losing party objected: “[T]he final judgment ordered the paying of overhead through the date of the trial. There is no provision in the final judgment or anywhere else where this Court ordered any sort of continuing obligation after the date of judgment. Frankly, if it did, it wouldn’t be a final judgment. There simply is no provision in the final judgment for the amount that counsel is proposing for additional overhead.”
4. Court of appeals, second time. “We agree . . . .on remand the trial court had no authority to address the matter of overhead expenses, which had been finally adjudicated by our first opinion, judgment, and mandate. We remanded this case with specific instructions [about attorneys’ fees].”

Pelley v. Wynne, No. 05-18-00550-CV (June 13, 2019).

Here is a copy of my PowerPoint from today. Thanks to all who came out, and to the DBA Appellate Section for the  invitation!

On Thursday June 13 at noon, I will speak to the DBA Appellate Law Section (and anyone else within earshot) to give an update on business law cases from the Dallas Court of Appeals in 2019. This should be a fun opportunity to look at the impact of the Slate of Eight since taking office at the start of the year. I will post the PowerPoint after the event (since it will not be done until then!)

600Commerce’s sister blog once described a federal appeal that became moot when, literally, the ship had sailed; a similar principle applies in a dispute about the right of possession (in Texas practice, a forcible detainer action), which becomes moot when “a writ of possession had been served on appellant” and thus “appellant is no longer in possession of [the] premises.” Jones v. Willems, No. 05-18-01191-CV (June 7, 2019). (The ship in question, since reflagged as the M/V CALHOUN, is in Singapore as of the date of this post, still well away from Fifth Circuit jurisdiction).

The 35-mile distance between the Collin and Dallas County courthouses (right) was dispositive in Condie v. McLaughlin, which presented this venue error:

• McLaughlin sued Condie for breach of contract in Dallas, and won summary judgment in January 2016.
• Later that year, Condie’s P.C. sued McLaughlin for breach of (the same) contract in Collin County.
• McLaughlin sought transfer to Dallas, arguing that venue there was mandatory under CPRC § 15.062, because the PC’s claim was a “compulsory third-party claim that should have been brought” in the original Dallas suit.
• The trial court agreed and transferred (noting that it was not relying on the “convenience” provisions of CPRC § 15.002(b)).

The Fifth Court reversed – and with that reversal, vacated a favorable summary judgment that McLaughlin had gone on to win in Dallas – because “the record reflects no attempt, proper or otherwise, by Condie to join [the PC] in McLaughlin’s original suit against her” as required by § 15.062. No. 05-18-00085-CV (June 3, 2019) (mem. op.)

The recent Texas Supreme Court case of Pathfinder Oil & Gas v. Great Western Drilling reminds: “Parties can . . . waive their right to proof of a fact or an element of a claim through a written stipulation or one made in open court.” No. 18-0186 (Tex. May 24, 2019). Such agreements, commonly called “Rule 11 Agreements” in Texas practice for the relevant state rule of civil procedure, are “contracts relating to litigation” and are “construe[d] . . . under the same rules as a contract.” The more challenging question about a challenge to formation of such an agreement, rather than its interpretation, is the subject of  a recent article that I co-authored in a  State Bar Litigation Section publication.

BCH Development sought to build a two-story house; the neighborhood association sued to enforce a restrictive covenant limiting construction to a “single family dwelling not to exceed one story in height.” Because a two-story house stood on the neighboring lot, BCH argued waiver; the association countered that 1 nonconforming lot out of 104 could not establish waiver. The Fifth Court remanded for trial on the issue of waiver, noting: “Waiver in restrictive covenant cases is a fact-intensive inquiry involving multiple factors. A statistical analysis is but one component in determining the issue of waiver. Also relevant are the nature and severity of existing violations, any prior acts of enforcement of the restriction, and whether it is still possible to realize to a substantial degree the benefits intended through the covenant.”  BCH Development v. Lakeview Heights Addition Property Owners’ Assoc., No. 05-17-01096-CV (March 21, 2019). Notably, the opinion was decided by a 2-judge panel of Justices Myers and Brown, after Justice Evans was not re-elected in 2018.

A steady stream of cases about the scope of the TCPA (as well as the third dissent of 2019 by Justice Whitehill) continued in Erdner v. Highland Park Emergency Center. The appeal was from the denial of a TCPA motion about the alleged usurpation of the opportunity to build an emergency-care facility in Fort Worth; the majority (Justice Molberg, joined by Justice Reichek) affirmed, holding:

• Association. “The communications between Erdner and the Arizona investors were private communications relating to establishing a business . . . [and] did not involve public or citizen’s participation . . . .”
• Speech. The majority rejected the dissent’s “wispy” approach to the term “related to” in the TCPA, reasoning: “The fact that the communications could result in healthcare service being offered to the public at some location at some point in the future is not enough to bring them within the scope of the TCPA.”

The dissent joined the majority’s conclusion about the right of association, based on Fifth Court precedent, but differed as to interpretation of the phrase “related to”: “[D]iscussions about starting a new emergency room are at least tangentially related to the current and future health of people in the area and to the surrounding community’s well-being.” No. 05-18-00654-CV (May 22, 2019).

The resolution of the TCPA motion in In re Hartley unfolded as follows:

• Radix Realty sued the Hartleys. Panchakarla the intervened on the side of Radix.
• The Hartleys moved to dismiss under the TCPA. The trial court had a hearing on that motion on February 18, 2019.
• The trial court granted the motion on February 22, well ahead of the March 20 statutory deadline.
• Panchakarla moved for a new trial on March 22.
• On May 6, 2019, the trial court vacated its February 22 order and issued a new order denying the Hartleys’ motion to dismiss.

The Hartleys sought a writ of mandamus against the May 6 rulings, and the Fifth Court agreed: “The trial court was statutorily prohibited from granting Panchakarla’s motion for reconsideration and for new trial more than thirty days after the hearing on the TCPA motion and, as such, the trial court’s May 6, 2019 order is void.” No. 05-19-00571-CV (May 24, 2019) (mem. op.)

“Edes asserts there is sufficient lay evidence of causation and directs us to testimony by himself and a co-worker that he developed symptoms immediately after the accident that he did not have before the accident. But evidence of an event followed closely by manifestation of or treatment for conditions which did not appear before the event raises only suspicion that the event at issue caused the conditions and is not legally sufficient to support a finding of legal causation.” Edes v. Arriaga, No. 05-17-01278-CV (May 24, 2019) (mem. op.) (applying Guevara v. Ferrer, 247 S.W.2d 662, 668 (Tex. 2007) (emphasis added)).

In In re: Rohrich, the relator sought “a writ of mandamus directing the trial court to vacate a May 2, 2019 show cause order and a March 4, 2019 order compelling production of data referenced in an April 2018 article written by relator.”

“Due to the extraordinary nature of the remedy, the right to mandamus relief generally requires a predicate request for action by the respondent, and the respondent’s erroneous refusal to act.” (quoting In re: Coppola, 535 S.W.3d 506, 510 (Tex.2017) (orig. proceeding) (emphasis added)).

Because “relator ha[d] not presented his arguments to the trial court regarding compliance with the order compelling production or regarding objections to the production,” he was “therefore, not entitled to mandamus relief.” No. 05-19-00578-CV (May 20, 2019) (mem. op.)

Applying Dyer v. Medoc Health Services LLC, No. 05-18-00472-CV (March 8, 2019), the Fifth Court declined to apply the TCPA to certain business-related communications, even though they related to the generally-important topic of health care.  The Court also found that the TCPA’s commercial speech exemption applied to a DTPA counterclaim. Staff Care v. Eskridge Enterprises, No. 05-18-00732-CV (May 15, 2019) (mem. op.)

Daigrepont v. Preuss reversed a default judgment for failure to comply with an order authorizing substituted service under Tex. R. Civ. P. 106(b).

• “The trial court’s order required ‘the Citation, First Amended Petition, initial discovery requests, and this Order’ be left with a person over the age of 16 or by leaving the documents on the front door of Daigrepont’s residence. It further required ‘a copy of the Citation, Petition, initial discovery requests, and this Order’ be mailed by certified mail, return receipt requested and by regular mail.”
• However: “The return of service affidavits indicate the process server posted the citation, plaintiff’s original petition, civil case information sheet, and order granting plaintiff’s motion for substitute service to his front door and mailed the
  aforementioned documents per the court’s order.”

“By failing to strictly follow the order, Preuss violated rule 106(b). Violation of rule 106(b) makes service of process invalid and of no effect.” No. 05-18-01271-CV (May 17, 2019) (mem. op.)

Tactical Communications alleged that Krasnicki failed to make certain technical disclosures to it; Krasnicki moved to dismiss under the TCPA: But “Tactical did not allege any oral, written, audiovisual,or electronic communications inits claims against Krasnicki. The basis of Tactical’s claims against Krasnicki rests solely on its assertion that Krasnicki failed to communicate with Tactical.” (emphasis added) Accordingly, the Fifth Court affirmed denial of the motion with a straightforward observation: “[C]onstruing the definition of ‘communications’ to include non-communications would lead to an absurd result as nothing would be outside the scope of the TCPA.” Krasnicki v. Tactical Entertainment, LLC, No. 05-18-00463-CV (May 16, 2019).

“Appellants did not request an evidentiary hearing on their motion for attorney’s fees even though Denney stated in her response that an evidentiary hearing is required before sanctions may be imposed. Her attorney stated at the hearing that he was prepared to offer testimony in response to appellants’ request for sanctions.  Appellants, however, never offered any evidence at the hearing and never objected to  the lack of an evidentiary hearing on their motion. . . .  On appeal, Dallas Metro and Net Worth’s rely on documents and portions of Denney’s deposition attached to their motion for attorney’s fees as evidence to support their claim. However, the documents and deposition testimony were never admitted into evidence. As a result, the documents were not before the trial court and cannot be considered as evidence on appeal.” Net Worth Realty USA v. Denney, No. 05-18-00336-CV (March 6, 2019) (mem. op.) (citations omitted, emphasis added).

Ghidoni, the plaintiff in a legal-malpractice case involving the handling of a lawsuit about the noise caused by water wells, offered Anderson as an expert witness. Anderson was a trial lawyer of thirty years’ experience, but had not handled matters involving the specific water-law problem at issue in the underlying case. The Fifth Court affirmed the decision to exclude Anderson:

“By way of analogy, ‘there is no validity . . . to the notion that every licensed medical doctor should be automatically qualified to testify as an expert on every medical question.’ Extending this principle to the topic of legal malpractice, ‘that a person may be a licensed attorney . . . who holds years of experience in the practice of law, standing alone, will not qualify him or her to give an opinion on every conceivable legal question, including legal malpractice issues.” While the record in this case shows that Anderson has handled several malpractice cases as an attorney and has testified as an expert witness in two such cases, it contains no evidence about the particular issues that Anderson handled or addressed in these capacities. Nor did Ghidoni offer evidence regarding the specific water law issues that Anderson has handled. Absent such proof, we cannot say that the district court abused its discretion in excluding Anderson’s testimony.”

Ghidoni v. Skeins. No. 05-18-00355-CV (May 10, 2019) (mem. op.) (citations omitted).

On May 16 at the Belo Mansion, the DBA Appellate Section presents a panel discussion among the eight newly-elected Justices of the Fifth Court of Appeals (a/k/a, the “Slate of Eight“), moderated by Justice Lana Myers, a 20-year veteran of the Fifth Court.. The Section’s announcement of the program goes on to say: “If you have a question you would like the panel to answer, please send it to DBAAppellateChair@gmail.com. The panel will try to answer pre-submitted questions during the presentation as time permits.”

The appellant in Sumner v. Harbor Owners Ass’n disputed the conditioning language used in an award of attorneys’ fees against him, arguing that an award of “$10,000 in attorneys’ fees if [appellant] unsuccessfully appeals to the Texas Supreme Court” failed to ” set out the steps in an appeal to the Texas Supreme Court.” The Fifth Court found that this level of detail was unnecessary, and “[b]ecause the award of appellate fees is conditioned on [Appellant]’s unsuccessful appeal, we conclude the trial court’s award
is not in error.” No. 05-18-00580-CV (May 1, 2019) (mem. op.)

LaFrance argued that he was not personally liable for a contract debt. But – “LaFrance signed his name on the agreement’s signature line labeled Borrower’s Signature.’ He did not indicate a representative capacity. In the section titled ‘Liability,’ the agreement states, ‘Although this agreement may be signed below by more than one person, each of the undersigned understands that they are each as individuals responsible and jointly and severally liable for paying back the full amount.’ Because the agreement’s language can be given a definite legal meaning and is not reasonably susceptible to more than one interpretation, the agreement is unambiguous.” EcoFriendly Water Co. v. Mercer, No. 05-18-00763-CV (May 2, 2019) (mem. op.).

“We conclude the definition of ‘legal action’ in the TCPA does not encompass a motion for sanctions alleging discovery abuse by a party that is filed after, and in this case years after, the commencement of litigation. Further, construing the TCPA to apply to such a motion would open the floodgates to serial motions to dismiss during the pendency of litigation based on conduct ancillary to the substantive claims in the case.” Misko v. Johns, No. 05-18-00487-CV (May 1, 2019).

Clark sued Phillips, his former competitor in an an election for Kaufman County Commissioner, for defamation in campaign materials. Phillips lost a summary judgment motion and sought one of the many interlocutory appeals available under Texas’s Byzantine interlocutory-appeals statute; specifically, section 51.014(a)(6). The result is the second split in recent weeks between a Democratic majority and a Republican dissenter, as follows.

Justice Reichek, joined by Justice Molberg, held that the Fifth Court lacked jurisdiction: “The record before us shows that Phillips was a candidate for public office who  allegedly provided information that was published in mailers and on a website. Nothing in the record shows Phillips has ever engaged in professional news reporting or any other form of journalism or professional investigation and commentary about matters of public concern. Accordingly, Phillips does not qualify as a ‘member of the media (emphasis added),'” and thus could not avail himself of this statute.

Justice Whitehill, invoking Occam’s Razor, agreed with the majority’s conclusion but disagreed with the path of its reasoning: “In short, whether we have jurisdiction over Phillips’s appeal from the denial of his summary judgment motion in this defamation case depends on whether he asserted a ground based on the First Amendment, its Texas equivalent, or Civil Practice and Remedies Code Chapter 73. He didn’t. Enough said. That should end the appeal. . . . Because there is a straightforward answer to this case without exploring in the first instance the boundaries of what constitutes the electronic media, we should follow the straightforward path and wait until when defining the electronic media is necessary to decide the case then before us (emphasis added).” Phillips v. Clark (links to both opinions above), No. 05-18-00556-CV (May 3, 2019).

Celebrate the Cinco de Mayo with 5 key Dallas court of appeals cases from 2019!

A significantly limited new version of the TCPA has passed the Texas House; a similar version is still pending in the Senate.The bill addresses several aspects of the statute’s application in business cases.

The TCPA says: “If a legal action is based on, relates to, or is in response to a party’s exercise of the right of free speech, right to petition, or right of association, that party may file a motion to dismiss the legal action.” Encore Enterprises, Inc. v. Shetty involved a Sabine Pilot claim in which the plaintiff alleged wrongful termination after raising concerns about tax issues. The Fifth Court affirmed the denial of the defendant corporation’s motion to dismiss, observing: “Here, Encore’s motion to dismiss did not argue that Shetty’s lawsuit is based on, relates to, or is in response to Encore’s communications about Shetty. Rather, Encore argued that Shetty’s lawsuit is based on Shetty’s communications to Encore about allegedly illegal activities that Encore maintains are matters of public concern.” No. 05-18-00511-CV (April 29, 2019) (mem. op.) (emphasis added).

The Texas anti-SLAPP statute has generated an enormous amount of litigation and commentary, especially with the Legislature in session and actively considering amendments. Interestingly, one of the most successful defendants to invoke this statute is President Trump, who used it last year in California federal court to obtain dismissal of a defamation claim about the above Tweet, as well as a substantial award of attorneys’ fees. The district court’s opinion is interesting reading on the merits, as well on choice-of-law and the Ninth Circuit’s treatment of the underlying Erie issue.

In its introduction to a comprehensive discussion of attorneys’-fee recovery, the Texas Supreme Court said: “It should have been clear from our opinions in [three earlier case] that we intended the lodestar analysis to apply to any situation in which an objective calculation of reasonable hours worked times a reasonable rate can be employed. We reaffirm  today that the fact finder’s starting point for calculating an attorney’s fee award is determining the reasonable hours worked multiplied by a reasonable hourly rate, and the fee claimant bears the burden of providing sufficient evidence on both counts.” Rohrmoos Venture v. UTSW DVA Healthcare LLP, No. 16-0006 (Tex. Apr. 26, 2019) (emphasis added).

In a macabre echo of the old English case about the two ships Peerless, in SIG-TX Assets, LLC v. Serrato, Serrato family members accused a funeral home of confusing the bodies of two women named Maria. The funeral home sought to compel arbitration under a theory of direct-benefits estoppel, and the panel majority disagreed: “[A]though SIG-TX’s duty to prepare and inter Maria’s body arose from the contracts, there is an independent duty under Texas tort law to immediate family members not to negligently mishandle a corpse.” A dissent saw the family-members’ claims as directly analogous to those of the nonsignatory to the construction contract in In re: Weekley Homes, 180 S.W.3d 127 (Tex. 2005). No. 05-18-00462-CV (April 23, 2019) (mem. op.) (Partida-Kipness, J., for the majority, joined by Carlyle, J.; Bridges, J., dissenting).

A judgment creditor sought mandamus relief, in the trial court, to require the Dallas sheriff to execute necessary title documents after a seizure and forced sale. The Fifth Court (which affirmed the grant of mandamus relief) observed: “An original proceeding for a writ of mandamus initiated in the trial court is a civil action subject to trial and appeal on substantive law issues and the rules of civil procedure as any other lawsuit. This Court has appellate jurisdiction over such proceedings” Gabriel v. Outlaw, No. 05-18-00503-CV (April 22, 2019) (mem. op.)

“[I]n concluding the agreed temporary injunction is void and must be dissolved, we necessarily reject Hanson’s contentions that because appellants agreed to the temporary injunction and failed to raise these technical defects in their motion to dissolve, they should be precluded from complaining about the order’s deficiencies under rule 683. We can declare a temporary judgment void even if the parties have not raised the issue. Moreover, because a temporary injunction order that fails to comply with rule 683 is void, a party cannot waive the error by agreeing to the form or substance of the order.” Reiss v. Hanson, No. 05-18-00923-CV (April 22, 2019) (mem op.)

Reiss distinguishes the Fifth Court’s December 2018 opinion about an injunction’s lack of specificity (as opposed to voidness) in In re: Rajpal, which noted: “Relators also claim that the agreed injunction likewise fails for lack of specificity. This argument, however, overlooks that both parties agreed to the entry of this temporary injunction. As a result, Relators are estopped to complain.”

In a recent mandamus opinion, the Fifth Court found that laches began to run when a coordinator’s “e-mail states specifically that the judge had granted the motion to strike and, as such, signing an order was merely a ministerial act.” In re Yamaha Golf-Car Co., 05-19-00292-CV (April 8, 2019) (mem. op.) As a direct-appeal counterpoint, Swart v. Morales holds: “Although the record includes a memorandum ruling on the trial court’s letterhead, the ruling is not signed. This Court has jurisdiction over appeals from signed orders or judgments. Without a signed appealable order, this Court lacks jurisdiction over this appeal.” No. 05-18-01229-CV (April 10, 2019) (mem. op.) (citations omitted).

“’A mortgagor qualifies as a consumer under the DTPA if his or her primary objective in obtaining the loan was to acquire a good or service, and that good or service forms the basis of the
complaint.’ But a mortgagor challenging how an existing mortgage is serviced is not a consumer because the basis of the claim is ‘the subsequent loan servicing and foreclosure activities, rather than the goods or services acquired in the original transaction.’ Also, ‘[a]n activity related to a loan transaction is a ‘service’ for DTPA purposes only if the activity at issue is, from the plaintiff’s point of view, an objective of the transaction, not merely incidental to it.’
Appellant’s DTPA claim is not premised on any deceptive acts regarding the purchase of the property itself. Her claims––e.g., that appellees failed to provide her with an accurate accounting and failed to comply with an alleged oral agreement to delay foreclosure––are based on how the mortgage loan was administered or serviced.” Ebrahimi v. Caliber Home Loans, Inc., No. 05-18-00456-CV (April 15, 2019) (mem. op.) (citations omitted, emphasis added).

How long is too long to rule on a pending motion? In In re Hines, it was just under seven months from the first written request for a hearing: “[R]elator’s certified mandamus record includes copies of a motion for judgment nunc pro tunc dated August 24, 2018, and letter requests to the trial court dated September 27, 2018 and November 7, 2018 requesting a hearing on the August 24, 2018 motion for judgment nunc pro
tunc. The trial court has had a reasonable time in which to rule on the motion but has taken no action. Under this record, we conclude the trial court has violated its ministerial duty to rule on relator’s motion for judgment nunc pro tunc within a reasonable time.” No. 05-19-00243-CV (April 15, 2019) (mem. op.) (emphasis added).

The unfortunately-worded judgment in Last Frontier Realty Corp. v. Budtime Forest Grove Homes, LLC provided:

. . . this Court finds that the Motion should be, and hereby is GRANTED in all respects.

 

IT IS THEREFORE ORDERED, ADJUDGED and DECREED that [Last Frontier’s] claims asserted herein are hereby dismissed with prejudice, and all costs of court are taxed against [Last Frontier].

 

This order disposes of all claims and all parties.

 

This order is final and unappealable, and all relief not expressly granted herein is denied.

(emphasis added). Sensibly, the Fifth Court held: “[T]he word ‘unappealable’ is a clerical error and [we] reform the trial court’s judgment to replace ‘unappealable’ with ‘appealable.’”

The flip side to the “controlling rule [that] forecloses resort to injunctive relief simply to sequester a source of funds to satisfy a future judgment” is that an “asset freeze” temporary injunction can issue on a proper showing. Here: “Comerica Bank presented evidence that in October 2017, after RWI Construction and RWI
Acquisition defaulted on their loan, RWI Construction collected $800,000 in settlement of a receivable owed by Oxy. Those funds were collateral for the loan at issue in this case. Rather than pay those funds over to Comerica Bank as required upon their receipt, RWI Construction transferred them to Lone Star. Accordingly, the evidence presented by Comerica Bank traced collateral for the loan to Lone Star, and those funds are both logically and justifiably connected to Comerica Bank’s breach of contract claim and the relief it seeks in this case.”

In the same vein, the Court noted that while a showing of insolvency can establish irreparable injury in such a context, it is not always necessary: “To a district court exercising discretion over an injunction decision, unwillingness to pay is just as significant, and perhaps more so, as an inability to pay.” RWI Construction Co v. Comerica Bank, No. 05-18-00265-CV (April 12, 2019).

“[T]he ancient and controlling rule forecloses resort to injunctive relief simply to sequester a source of funds to satisfy a future judgment. That general rule would not control where there is a logical and justifiable connection between the claims alleged and the acts sought to be enjoined, or where the plaintiff claims a specific contractual or equitable interest in the assets it seeks to freeze.” Accordingly, it was an abuse of discretion to enter a temporary injunction (beyond $800,000 as to which such a connection was shown), when “the injunction freezes Lone Star’s funds pretrial simply to assure their future availability to satisfy a judgment based solely on concerns about Lone Star’s general future liquidity.”  RWI Construction Co v. Comerica Bank, No. 05-18-00265-CV (April 12, 2019).

This coming Monday April 15 at the Belo Mansion, the Business Litigation Section presents an excellent panel discussion – “Business Appeals Before the Slate of Eight” – featuring . . . the “Slate of Eight”, the new Democratic judges elected to the Fifth Court last November. Looks like a “don’t miss” presentation.

In Agar Corp. v. Electro Circuits Int’l LLC, the Texas Supreme Court settled a persistent question about the statute of limitations for civil conspiracy, holding: “Because civil conspiracy is a derivative tort that ‘depends on participation in some underlying tort,’ . . . the applicable statute of limitations must coincide with that of the ‘underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable.'” No. 17-0630 (April 5, 2019).

The opinion does not appear to directly address two other recurring questions about civil conspiracy law in Texas today; namely, (1) the interaction between civil conspiracy and the Texas comparative-fault statute, and (2) whether a proper jury charge on civil conspiracy requires an instruction (or finding )about injury flowing from the conspiracy itself, as opposed to the damages attributable to the underlying tort. However, the Court’s thorough review of conspiracy law may offer indirect insight about those issues with further review.

In a serious personal injury case, the trial court denied the defendant’s designation of a responsible third party, and the Fifth Court denied mandamus relief for two reasons of substantial general interest:

1. No mandamus relief for an unsettled issue of first impression. The controlling question of law (what legal framework governs the designation of an emergency-care provider as a responsible third party) presented an issue of first impression. The Court noted that “[a]n issue of first impression can qualify for mandamus relief even though the factual scenario has never been precisely addressed when the principle of law has been clearly established,” but concluded: “Mandamus is unwarranted here because the principle of law Yamaha urged the trial court to follow is neither positively commanded nor plainly prescribed under the law.” (Fans of this blog will note that I identified this issue last year as a topic where the “Slate of Eight” could begin to narrow mandamus review.) 
2. Laches from an email announcement of a ruling. The Court found that laches barred mandamus relief, reasoning: “Yamaha waited eight months after the trial court’s July 12, 2018 e-mail ruling to seek mandamus relief, filed the petition only three weeks before trial, and initially offered no explanation for the delay. In its reply brief, Yamaha argues that the e-mail from the court coordinator was not sufficiently clear and specific to be reviewed by mandamus but was, instead, simply an expression of future intent to sign a written order. We disagree. The e-mail states specifically that the judge had granted the motion to strike and, as such, signing an order was merely a ministerial act.” (citations omitted). (For reference here is the first page of the email in question.)

In re Yamaha Golf-Car Co., 05-19-00292-CV (April 8, 2019) (mem. op.)

Footnote 11 of the Texas Supreme Court’s recent opinion in West v. Quintanilla clarified the two distinct doctrines, each of which is commonly referred to as “the parol evidence rule”: “The contract-construction rule applies when a contract is written and unambiguous, and it prohibits consideration of oral or extrinsic evidence to modify or add to the contract’s terms. ‘[T]he construction of an unambiguous contract, including the determination of whether it is unambiguous, depends on the language of the contract itself, construed in light of the surrounding circumstances.’ By contrast, the parol evidence rule applies when a contract is written and integrated, and it precludes enforcement of any prior or contemporaneous agreement that is inconsistent with the written contract’s terms.” No. 17-0454 (Tex. Apr. 5, 2019) (citations omitted).

Silverado’s answer was stricken because, as an LLC, it could not proceed pro se. A default judgment resulted and Silverado affirmed. Among other holdings, as to Silverado’s challenges to the damages evidence, the Fifth Court held: “An objection that an affidavit in support of a motion for summary judgment contains hearsay is an objection to the form of the affidavit. To preserve this complaint for appellate review, Silverado was required to make the objection in the trial court and obtain a ruling from the trial judge. Because it did not retain counsel or otherwise appear as ordered, Silverado obviously did not make a hearsay objection in the trial court and, therefore, has waived its complaint on appeal.” Silverado Truck & Diesel Repair LLC v. Lawson, No. 05-18-00540-CV (April 3, 2019) (mem. op.) (citations omitted).

“Appellate timetables do not run from the date the non-suit is filed, but from the date the trial court signs the order of dismissal.” Kerville Fitness Property LLC v. PE Services LLC, No. 05-17-01317-CV (March 25, 2019) (mem. op.) (citing In re: Bennett, 960 S.W.2d 35 (Tex. 1997)). Accordingly, a partial summary judgment order, coupled with a nonsuit of other claims, does not create finality for purposes of appellate deadlines.

Mauldin v. Redington was a residential lease dispute about an elegant property on Dallas’s Swiss Avenue (right). A key issue was agency, and the Fifth Court found it was not proven:

‘Mauldin contends there is no evidence of Holt’s actual authority to sign his name to the agreement, and we agree. The evidence shows Mauldin helped Holt with expenses, and Holt told Mauldin she “thought that it would require his participation” for her “to get the lease” and she “thought he said, yes.” But, the only evidence regarding Holt’s authority to sign Mauldin’s name to the agreement was her understanding that he agreed to let her “use his information to pay [her] lease” and, from that, she inferred she was allowed to sign his name. Even then, Holt acknowledged it was possible Mauldin did not understand what she was asking of him. We conclude Holt’s vague deposition testimony is no more than a scintilla of evidence that the scope of her actual authority, if any, extended to legally binding Mauldin to the agreement by signing his name.

. . .
Moreover, an alleged agent’s declarations alone are incompetent evidence to establish the existence or scope of an alleged agency.’

No. 05-18-00401-CV (March 29, 2019).

The jury in Aztec Systems, Inc. v. glendonTodd Capital, LLC found a “joint enterprise” among the defendants in a contract dispute and the Fifth Court reversed. Assuming without deciding that the doctrine applied outside the tort context, the Court found that no evidence showed “how, or whether, the monetary benefits of the enterprise were shared,” or that the two businesses had “an equal right to a voice in the direction of the enterprise.” Potential profit from an eventual sale of one of the businesses was “insufficient to establish a community of pecuniary interest.” No. 05-18-00183-CV (March 29, 2019) (mem. op.) (applying, inter alia, David L. Smith & Assocs.. LLP v. Stealth Detection, Inc., 327 S.W.3d 873 (Tex. App.–Dallas 2010, no pet.)

This month’s “Headnotes” from the Dallas Bar Association has two items of particular interest — on page 18, information about each of the new “Slate of Eight” Justices on the Fifth Court; and on page 19, an article by me and my LPCH colleague John Volney about the Fifth Court’s recent cases on “trial by consent.”

In its third case this term about the effect of contractual disclaimers in commercial disputes, the Texas Supreme Court held:

‘We have no trouble concluding that the factors generally support a finding that Lufkin effectively disclaimed reliance on IBM’s misrepresentations. The parties negotiated the Statement of Work at arm’s length, they were both knowledgeable in business matters and represented by counsel, and the two clauses expressly and clearly disclaim reliance. But as Lufkin points out, the clauses only disclaim reliance on representations that are “not specified” in the Statement of Work or the Customer Agreement. Relying on two other provisions, Lufkin argues that the misrepresentations on which it based its fraudulent-inducement claim were “specified” in the Statement of Work, and at a minimum, reading those provisions together with the disclaimers’ “not specified” language renders the clauses too ambiguous to be enforceable. We are not convinced.‘

Encompass Office Solutions v. Blue Cross & Blue Shield of Louisiana, No. 17-0666 (Tex. March 15, 2019).

A complicated tangle of arbitration, court, Texas and New Jersey produced a basic insight about forum-selection litigation: “Webb’s forum concerns highlight practical but all-too common and not-at-all error-establishing issues in modern litigation. He may have to travel further than he would like and may have to work harder to get witnesses properly to the New Jersey courts, but Webb has made insufficient showing on any part of the relevant analysis.” A footnote summarized case authority on this basic point, that all too often gets shunted to the end of a multi-factor analysis in a dispute about the proper forum. Webb v. Diversegy, LLC, No. 05-17-01258-CV (March 13, 2019) (mem. op.)

John Ellis, a former employee of DART, sued for discrimination and encountered a confoundingly complicated area of governmental-immunity law. The Fifth Court, concluding that “we are bound by controlling supreme court precedent in this area of perplexing legislative enactments,” held: “We cannot conclude in these circumstances that a waiver of governmental immunity is clear and unambiguous, as is required. Like the Norman [supreme court opinion], we view the law as ‘too internally inconsistent’ to meet that standard.” Ellis v. DART, No. 05-18-00521-CV (March 13, 2019).

My LPCH colleague John Adams and I have argued that the Fifth Court’s power to rehear cases en banc is best used for “Goldilocks” cases – issues big enough to be important in other cases, but no so important that the Texas Supreme Court is likely to preempt whatever the Dallas court may do. In that spirit, the 13-0 opinion in Chakrabarty v. Ganguly reversed a longstanding Fifth Court precedent about whether money and stocks were “tangible personal property” within the meaning of the Family Code. No. 05-17-01195-CV (March 7, 2019).

Dyer v. Medoc Health Services is a TCPA opinion by Justice Molberg, a prominent member of the newly-elected “Slate of Eight.” It declines to apply the TCPA in a commercial trade-secrets dispute, holding, inter alia:

Association. “Because the text messages between Basiti and Dyer were private communications related to an alleged conspiracy between the two men and did not involve public or citizen’s participation, it would be “illogical” to apply the TCPA to those communications”

Speech. “We cannot conclude communications discussing allegedly tortious conduct are tangentially related to a matter of public concern simply because the proprietary and confidential information that was to be misappropriated belonged to a company in
the healthcare industry or because the alleged tortfeasors hoped to profit from their conduct.”

Petition.  “However, even assuming Dyer’s actions, and the communications relating to those actions, were “petitioning” activities as defined by the TCPA, appellants failed to establish appellees’ claims were based on, related to, or in response to any communications between Dyer and any other person about the FBI investigation or on Dyer’s providing appellees’ proprietary software and confidential information to the FBI.”

No. 05-18-00472-CV (March 8, 2019). The Texas Supreme Court has assertively advanced a broad reading of the TCPA, including multiple reversals of the Fifth Court; the handling of any petitions for review in this case will be of great interest to the commercial-litigation bar.

Morben Realty successfully sued Texas Capital Holdings; the trial court denied recover of attorneys’ fees and the Fifth Court reversed, noting: “Texas law has ‘long distinguished attorneys’ fees from damages.’ So does this contract.” Specifically, the section on remedies “generally provides the seller with a liquidated damages remedy if the purchaser defaults” –

Seller shall, as Seller’s sole remedy, be entitled to terminate this Contract and receive and retains the Earnest Money deposit as liquidated damages; it being specifically agreed between Seller and Purchaser that Seller’s actual damages in the event of Purchaser’s default would be impossible to ascertain and the Earnest Money Deposit is a reasonable estimate of the same . . . .

But another section addressed the recovery of fees by the prevailing party –

In the event either party to this Contract commences legal action of any kind to enforce the terms and conditions of this Contract, the prevailing party in such  litigation shall be entitled to collect from the other party all reasonable costs, expenses, and attorney’s fees incurred in connection with such action.

Morben Realty v. Texas Capital Holdings, No. 05-17-01105-CV (Feb. 27, 2019) (mem. op.)

Douglas asked Dallas Performance to install a new camshaft in her 2004 Corvette (example, to the right); while doing so, the company also did about $5,000 in additional engine work. Among other holdings, the Fifth Court rejected the company’s quantum meruit claim, observing Douglas’s testimony that she lacked notice of the work or the company’s expectation of her payment for it, and noting that no jury question asked whether her boyfriend was her authorized representative. Douglas v. Sims, No. 05-17-01187-CV (Feb. 26, 2019).

The Texas Supreme Court’s recent opinion in Mercedez-Benz v. Carduco holds, in a nutshell, that this clause foreclosed fraud claims based on alleged misrepresentations about exclusive area for a car dealership:

MBUSA will assign to Dealer a geographic area consisting of a collection of zip codes or census tracts that is called an Area of Influence (“AOI”). MBUSA may alter or adjust Dealer’s AOI at any time. The AOI is a tool used by MBUSA to evaluate Dealer’s performance of its primary obligations hereunder. Dealer agrees that it has no right or interest in any AOI and that MBUSA may add new dealers to or relocate dealers into Dealer’s AOI. Any such addition or relocation of a dealer will result in an alteration or adjustment of Dealer’s AOI.

No. 16-0644 (Tex. Feb. 22, 2019).

Amcad sued Freightquotes.com about a misplaced delivery. Freightquoutes moved to dismiss, pointing out that the relevant bill of lading incorporated “terms and conditions” on the company website, which in turn contained a Missouri foum-selection clause. Freightquotes lost in the trial cost and lost again before the Fifth Court. The panel majority (Justice Myers, joined by Justice Carlyle) “conclude[d that] the referring language is ambiguous as to who agreed to which Organization’s terms and conditions and does not unambiguously incorporate by reference Freightquote’s terms and conditions,” and thus denied mandamus relief. The dissent (Justice Whitehill) reasoned that “the parties plainly agreed to governing, written terms and conditions residing at a specific and readily accessible website” that plainly encompassed this dispute. No. 05-18-01028-CV (March 1, 2019) (mem. op.) (both opinions, applying Bob Montgomery Chevrolet Inc. v. Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App.—Dallas 2013, no pet.)).

While litigants are understandably enthusiastic about the automatic right of appeal of the denial of a TCPA motion, the courts of appeal are understandably reluctant to expand that right beyond what the statute allows. In Pope-Nixon v. Howard, Ms. Pope-Nixon sued Mr. Howard and Mr. Green. Howard won his TCPA motion to dismiss and and an appeal ensued. The court of appeals found that it lacked jurisdiction, noting that “the trial court’s order left pending the damages issue and Green had not moved for dismissal . . . .” No. 05-18-01215-CV (Feb. 25, 2019) (mem. op.)

The Texas Supreme Court’s opinion in Mercedez-Benz v. Carduco has sparked discussion about the interplay between contract terms and oral representations. An important component of that discussion is that Court’s reminder that: “Another issue for Carduco in this case is the testimony of Renato Cardenas, Carduco’s sole owner and decision maker, who testified that none of the defendants actually made any oral representation to him about Carduco’s ability to move the dealership to the McAllen area as the exclusive Mercedes-Benz dealership there.” The lack of such evidence mooted a dispute over the situations where partial disclosure can create an obligation to make corrective representations. No. 16-0644 (Feb. 22, 2019).

A claim accrues when a wrongful act causes injury; if multiple wrongful acts occur, they may — or, may not — cause multiple injuries. Uncertainty on that point led to reversal of a summary judgment on limitations in Inman v. Loe: “In summary, to be entitled to final summary judgment, appellees had to prove conclusively that Inman’s contract and fiduciary breac h claims accrued more than four years before March 19, 2014. They relied on evidence showing that Inman was excluded from the company’s management and operation in June 2009. But Inman produced evidence that appellees committed other allegedly actionable conduct in August 2010, and nothing establishes that these acts did not result in a legal injury distinct from any injury Inman may have suffered in 2009.”  No. 05-18-00130-CV (Feb. 20, 2019) (mem. op.)

Among other important business-litigation issues recently addressed by the Texas Supreme Court in Bombadier Aerospace v. SPEP Aircraft Holdings, footnote 17 of the opinion provides a lengthy summary of potential Casteel issues in a jury question about damages – providing a not-so-subtle hint to be aware of potential appeal points in that highly technical area of Texas practice, as they are not reviewable absent objection. No. 17-0578 (Tex. Nov. 1, 2018) (noting, after describing the applicable principles: “Here, no party raises the issue of charge error, and no party objected to the jury charge on that basis; in fact, the parties explicitly agreed to the form of question four with a single blank for actual damages.  Therefore, although we note that question four arguably intermingles compensatory damages for diminution in value with damages for loss of warranty value, damages that Bombardier argues are unsupported, we express no opinion on the validity of question four under our broad-form damages question precedent.” (citations omitted)).

The district court declined to reinstate a “DWOP’d” suit to quiet title and the Fifth Court reversed, finding that the plaintiff had acted reasonably under the applicable Craddock factor: “The actions were not “intentional” or a result of “conscious indifference.” Logically, heirship had to be decided before the district court could determine whether appellants had standing to bring the quiet title action and whether appellees had improperly clouded the title to the mineral interests at issue. Moreover, Texas courts have a strong policy supporting resolution of cases on their merits, and in promoting the predictability of property ownership and reliability of land titles, both of which strongly support the reinstatement of appellants’ claims.” Brooks-PHS Heirs LLC v. Bowerman, No. 05-18-00356-CV (Feb. 11, 2019) (mem. op.).

After a February 12 oral argument (scroll down for the link to the lengthy media file) where skepticism was expressed about applying the TCPA to trade-secret litigation, on February 14, the Fifth Court issued an order lifting the automatic stay created by statute during the appeal of the denial of a TCPA motion to dismiss. That order allows temporary-injunction and related proceedings to continue in the trial court. Dyer v. Medoc Health Services, LLC, No. 05-18-00472-CV.

A default judgment was set aside in a restricted appeal because the plaintiff’s pleading did not establish that the debt at issue was unliquidated when the proof was conclusory:

RGD’s amended petition states, with respect to its sworn account claim, that a contract to purchase products was entered into by the parties, RGD thereafter provided goods to MG, and “all of the goods were not paid for.” RGD then cites to Exhibit “A” as a systematic record of “an account covering certain products sold by [RGD to MG].” Exhibit “A” contains a single page with several entries, none of which clearly identifies the items constituting the account. Nor does Exhibit “A” indicate that the amounts listed thereon are unpaid. The accompanying “Sworn Account Affidavit,” signed by RGD’s credit manager, merely proves up Exhibit “A” as a business record and, without more, avers in conclusory fashion that GM owes RGD “$17,131.23 plus interest.” Neither a contract nor invoices are attached.

MG Int’l Menswear v. Robert Graham Designs, No. 05-18-00517-CV (Feb. 15, 2019) (mem. op.).

In Gibson v. Stonebriar Mall LLC, a premises-liability claim, the plaintiff sought a continuance; her motion “asserted she needed more time to obtain the  depositions of (1) a Nordstrom employee who allegedly received information regarding a patron falling in the same area prior to her fall; (2) the Mydatt security guard or other employee who treated the sidewalk; and (3) a Stonebriar corporate representative,” as well as “identification of mall management assigned to respond to the scene,” and “information that Mydatt’s contract with Stonebriar may have been conveyed to another corporation prior to the incident.” The supporting declaration from her attorney did not “explain[] that Gibson used diligence in obtaining this discovery or was denied the discovery,” and also “d[id  not explain the materiality, relevance, and purpose of the discovery sought other than stating, ‘These are material fact witnesses who have yet to be identified and deposed.'” For this and other reasons, there was no abuse of discretion in denying the continuance. No. 05-17-01242-CV (Feb. 8, 2019) (mem. op.)

The Fifth Court reversed the denial of Gattenby’s motion for new trial after a default judgment by a bank, finding that he raised a meritorious defense (the other two Craddock factors not being at issue:  “[T]he record before us does not include evidence of an assignment between these two financial institutions. Rather, the Bank supported its claim for damages with a billing statement from a bank not party to this suit. To the extent the Bank contends ownership is established because the last four digits of theaccount listed in its original petition is identical to the last four digits of the account listed on Town North Bank’s billing statement attached to the Bank’s motion for default judgment, we reject its argument. Separate documents containing the same last four digits of an account is not evidence of an assignment” Gattenby v. TIB, No. 05-18-00168-CV (Feb. 6, 2019).

In the wake of In re: Houston Specialty Ins. Co., No. 17-1060 (Tex. 2019), the Fifth Court released a revised opinion in In re Texas Christian Univ, concluding that TCU’s filing of a Tarrant County declaratory judgment action established “dominant jurisdiction” as to a damages case filed against it the next day in Dallas County. Applying the Houston Specialty framework, the Court found that the two lawsuits were “inherently interrelated,” a test substantially derived from the compulsory counterclaim rule. The Court found no exception to the applicability of the “first-filed” rule in this situation, noting that complaints about the propriety of the Tarrant County action were for that court, and “as the case currently stands, the Tarrant County court concluded TCU’s claims are not frivolous by denying [Dallas Plaintiff’s] rule 91a motion to dismiss.” No. 05-18-00967-CV (Feb. 6, 2019).

Telfer v. Adams presented the question whether an objection to an affiant’s lack or personal knowledge was a defect in “form” or “substance,” and thus whether a trial court objection and ruling is necessary to preserve error about the affidavit’s consideration under Seim v. Allstate Texas Lloyds, 551 S.W.3d 161 (Tex. 2018). The Fifth Court sidestepped the question by concluding that the notary’s acknowledgement was sufficient to prove up the attached documents. The Court noted that its prior opinions were not consistent on the point, and cited an informative article by now-Magistrate Judge David Horan about the Fifth Circuit’s practices on this topic: “Because panels lack the authority to overrule one another, our first decision touching upon a question should control pending en banc reconsideration.” No. 05-17-01387-CV (Feb. 8, 2019) (mem. op.) (The mild incongruity of a rule about the resolution of uncertainty appearing in a memorandum opinion, which assumes that “the issues are settled,” Tex. R. App. 47.2, is a byproduct of 2003 rule amendments that reconfigured the types of appellate opinions in Texas.)

Hearsay must be “offer[ed] in evidence to prove the truth of the matter asserted in the statement.” Tex. R. Evid. 801(d)(2). Conversely, if an “[a]greement was offered to show that an agreement had been made and what its terms were,” then “[]he [a]greement was not hearsay.” In re: M.S. , 115 S.W.3d 534, 543 (Tex. 2003). The recitals in a substitute trustee’s deed present a close choice between these two principles, which the Fifth Court has resolved in favor of admissibility: “The recitals in the trustee’s deed set forth the facts on which the foreclosure sale was based and are germane to the deed’s purpose,” and are thus not excluded by the hearsay rule. Mack v. Tuesday Real Estate LLC, No. 05-18-00105-CV (Feb. 5, 2019) (mem. op.)

The Fifth Court affirmed summary judgment for the plaintiff, in a suit to recover an unpaid credit card balance, based on a record with two exhibits

• “The first exhibit attached to the Bank’s motion for summary judgment consisted of three types of documents: (1) twelve consecutive monthly statements for the period of June 11, 2015, to June 10, 2016, with a final balance of $17,445.84, each listing Alqawariq as the account holder, showing he made charges and payments, and demonstrating the Bank assessed transaction fees and charged interest; (2) Alqawariq’s credit card agreement; and (3) an applicant details record concerning [personal identifying] information about Alqariq . . . .”
• “The second exhibit contained a business records affidavit attaching the final account statement for the period of May 11, 2016, to June 10, 2016, which showed a balance of $17,445.84. In the business records affidavit, the custodian of records stated that: ‘[Alqawariq] opened an account with [the Bank], or a predecessor in interest, for the purpose of obtaining an extension of credit [] and did thereafter use or authorize the use of the [a]ccount for the acquisition of goods, services, or cash advances in accordance with the customer agreement [] governing use of the [a]ccount. Further, [Alqawariq] has failed to make periodic payments as required by the [a]greement.”

Alqaqwariq v. Bank of America, No. 05-18-00392-CV (Feb. 4, 2019) (mem. op.)

A stealthy Casteel issue was addressed by the Texas Supreme Court in Bombadier Aerospace v. SPEP Aircraft Holdings. The issue arose when the phrase “Plaintiffs” was defined to include several entities – only two of whom actually had a right to recovery damages. The Court found no harm, largely because the parties had reached a stipulation that mitigated potential confusion from the question. The issue is nevertheless worth noting as an aspect of Casteel that has not yet received analysis by the supreme court.

An issue in the Texas Supreme Court’s analysis of Bombadier Aerospace v. SPEP Aircraft Holdings, No. 17-0578 (Feb. 1, 2019), was whether an appraisal expert’s testimony created a legally sufficient foundation for the damages awarded. The Court found that it was: “Fogg did not attach specific dollar figures or percentage deductions to each of these issues to show exactly how he arrived at his 10% deduction. Nor did he examine a specific comparable aircraft; rather he conducted a general market examination for Challenger 300s. Indulging every reasonable inference in support of the verdict, we conclude that although Fogg’s reasoning for his valuation could have been more substantive, he sufficiently linked his conclusions about the Challenger 300’s value to available facts about its issues and the marketplace.” 

Notably, the expert explained credibly why certain valuation techniques were not used:  “[F]inding comparable values in the marketplace tends to be difficult for aircraft, and Fogg explained that the depreciation in value of an aircraft is a ‘variable number.’ And finding comparable values for aircraft with certain damage or issues may be impossible. Fogg made it clear that this particular Challenger 300 had unique issues and that the lack of documentation of all of these issues made the value uncertain . . . We note that Fogg’s experience with aircraft alone may be a sufficient basis for his valuation, and coupled with the engines’ issues, we conclude that he provided sufficient bases for his valuation opinion.”

In an important opinion for several basic commercial-law concepts, the Fifth Court’s opinion was affirmed in part and reversed in part by the Texas Supreme Court in Bombadier Aerospace v. SPEP Aircraft Holdings. More to follow, but the supreme court’s review of Dallas precedent on these topics is of substantial interest for area litigators. In particular, the supreme court enforced a waiver of exemplary damages: “We must respect and enforce terms of a contract that parties have freely and voluntarily entered…. Bombardier and the purchasing parties—sophisticated entities represented by attorneys in an arms-length transaction—bargained for the limitation-of-liability clauses to bar punitive damages.”

The restricted appeal – a unique feature of Texas civil procedure – allows an appeal for up to six months after judgment, so long as the appellant did not participate in the proceedings below and appellate review is limited to matters shown on the face of the court record. These proceedings usually involve belated challenges to default judgments, focusing on technical issues such as the language used in the return of service, compliance with the specific requirements of a statute about service, etc. The unusual restricted appeal in Ex parte Fallis – a substantive challenge by DPS to an expungement order – reminds that this procedural device can also be used to raise legal and factual sufficiency challenges. No. 05-18-00348-CV (Jan. 29, 2019) (mem. op.)